Sr86 Cliff June2020

the national bureau of asian research
nbr special report #86 | june 2020
a new u.s. strategy

for the indo-pacific
By Roger Cliff
NBR Board of Directors
John V. Rindlaub Roy D. Kamphausen Leave of Absence
(Chairman) President
Senior Managing Director and NBR Mark Jones
Head of Pacific Northwest Market Co-head of Macro, Corporate &
East West Bank Ryo Kubota Investment Bank, Wells Fargo Securities
Chairman, President, and CEO Wells Fargo & Company
Thomas W. Albrecht Acucela Inc.
Partner (Ret.)
Sidley Austin LLP Quentin W. Kuhrau
Chief Executive Officer Honorary Directors
Dennis Blair Unico Properties LLC Lawrence W. Clarkson
Knott Professor of the Practice Senior Vice President (Ret.)
University of North Carolina Melody Meyer
President The Boeing Company
Maria Livanos Cattaui Melody Meyer Energy LLC Thomas E. Fisher
Secretary General (Ret.) Senior Vice President (Ret.)
International Chamber of Commerce Long Nguyen
Chairman, President, and CEO Unocal Corporation
George Davidson Pragmatics, Inc. Joachim Kempin
(Vice Chairman) Senior Vice President (Ret.)
Vice Chairman, M&A, Asia-Pacific (Ret.) Kenneth B. Pyle
Professor, University of Washington Microsoft Corporation
HSBC Holdings plc
Founding President, NBR Clark S. Kinlin
Norman D. Dicks President and Chief Executive Officer
Senior Policy Advisor Jonathan Roberts
Founder and Partner Corning Cable Systems
Van Ness Feldman LLP Corning Incorporated
Ignition Partners
Richard J. Ellings George F. Russell Jr.
President Emeritus and Counselor Tom Robertson
Vice President and (Chairman Emeritus)
NBR Chairman Emeritus
Deputy General Counsel
Kurt Glaubitz Microsoft Corporation Russell Investments
Global Media Relations Manager
Chevron Corporation Mitchell B. Waldman
Executive Vice President, Government
and Customer Relations
Huntington Ingalls Industries, Inc.
NBR Counselors
Charles W. Boustany Jr. Thomas B. Fargo Jonathan W. Greenert
U.S. House of Representatives (Ret.) U.S. Navy (Ret.) John M. Shalikashvili Chair in National
Security Studies
Norman D. Dicks Aaron L. Friedberg
U.S. House of Representatives (Ret.) Princeton University Joseph Lieberman
Richard J. Ellings Slade Gorton U.S. Senate (Ret.)
NBR U.S. Senate (Ret.) Ashley J. Tellis
Carnegie Endowment for
International Peace
NBR Chairman’s Council and Board of Advisors
Michael Armacost Carla A. Hills Sam Nunn

Stanford University Hills & Company Nuclear Threat Initiative
Rodney Bindon Robert D. Hormats Joseph S. Nye Jr.
Bindon and Associates Kissinger Associates, Inc. Harvard University
Nicholas Eberstadt David Lampton Stanley Palmer
American Enterprise Institute Stanford University Marvin & Palmer Associates, Inc.
Karl Eikenberry Nicholas Lardy Dwight Perkins
Stanford University Peterson Institute for International Harvard University
Economics
Donald Emmerson Thomas Pickering
Stanford University Richard Lawless The Boeing Company (Ret.)
New Magellan Ventures
Lee Hamilton William Rademaker
Indiana University Chae-Jin Lee Flybuy Technologies
Claremont McKenna College
Stephen Hanson Clarine Nardi Riddle
College of William and Mary Kenneth Lieberthal Kasowitz, Benson, Torres
Brookings Institution & Friedman LLP
Harry Harding
University of Virginia William J. Lynn, III Stanley Roth
DRS Technologies, Inc. The Boeing Company
Donald Hellmann
University of Washington Rajan Menon Sheldon Simon
City College of New York Arizona State University
Robert J. Herbold
The Herbold Group, LLC Mary Minnick
Lion Capital
a new u.s. strategy

Roger Cliff
ROGER CLIFF conducts research on international relations in the Indo-Pacific. He

has worked for the Center for Naval Analyses, Atlantic Council, Project 2049
Institute, RAND Corporation, and Office of the Secretary of Defense. He holds
a PhD in international relations from Princeton University, an MA in Chinese
studies from the University of California San Diego, and a BS in physics from
Harvey Mudd College. He can be reached at <rcliff61@gmail.com>.
The NBR Special Report provides access to current research on special topics
conducted by the world’s leading experts in Asian affairs. The views expressed in
these reports are those of the authors and do not necessarily reflect the views of
other NBR research associates or institutions that support NBR.
The National Bureau of Asian Research is a nonprofit, nonpartisan research
institution dedicated to informing and strengthening policy. NBR conducts
advanced independent research on strategic, political, economic, globalization,
health, and energy issues affecting U.S. relations with Asia. Drawing upon an
extensive network of the world’s leading specialists and leveraging the latest
technology, NBR bridges the academic, business, and policy arenas. The
institution disseminates its research through briefings, publications, conferences,
Congressional testimony, and email forums, and by collaborating with leading
institutions worldwide. NBR also provides exceptional internship opportunities
to graduate and undergraduate students for the purpose of attracting and training
the next generation of Asia specialists. NBR was started in 1989 with a major
grant from the Henry M. Jackson Foundation.
Funding for NBR’s research and publications comes from foundations,
corporations, individuals, the U.S. government, and from NBR itself. NBR does
not conduct proprietary or classified research. The organization undertakes
contract work for government and private-sector organizations only when NBR
can maintain the right to publish findings from such work.
To download issues of the NBR Special Report, please visit the NBR website
http://www.nbr.org.
This report may be reproduced for personal use. Otherwise, the NBR Special
Report may not be reproduced in full without the written permission of NBR.
When information from NBR publications is cited or quoted, please cite the
author and The National Bureau of Asian Research.
This is the eighty-sixth NBR Special Report.
NBR is a tax-exempt, nonprofit corporation under I.R.C. Sec. 501(c)(3), qualified
to receive tax-exempt contributions.
© 2020 by The National Bureau of Asian Research.
Front cover image: U.S. Navy photo by Mass Communication Specialist 2nd
Class Jon Husman. The U.S. Navy hospital ship USNS Mercy, left, and the Japan
Maritime Self-Defense Force Osumi-class amphibious assault ship JDS Kunisaki,
right, participate in the Pacific Partnership exercise.
For further information about NBR, contact:

The National Bureau of Asian Research
1414 NE 42nd Street, Suite 300
Seattle, Washington 98105
206-632-7370 Phone
206-632-7487 Fax
nbr@nbr.org E-mail
http://www.nbr.org
a new u.s. strategy

TABLE OF CONTENTS
v Preface
viii
Executive Summary
1 Chapter 1: Introduction
11 Chapter 2: Long-Term Regional Trends
31 Chapter 3: The Strategies of Key Regional Actors
67 Chapter 4: Potential Major Events
97 Chapter 5: Resources Available to the United States for an Indo-Pacific Strategy
109 Chapter 6: A New U.S. Strategy for the Indo-Pacific

PREFACE
T
he international order in the Indo-Pacific is increasingly under pressure. For more than
a quarter century since the end of the Cold War, the United States’ military dominance,
combined with its commitment to freedom and economic openness, allowed the region
to enjoy an unprecedented period of peace and economic growth. However, the rise in
the military and economic power of China and the acquisition of nuclear weapons and delivery
systems by North Korea, neither of whose leaders believe in freedom and economic openness,
as well as other developments, now threaten this peace and economic growth. Successive U.S.
administrations have recognized the increasing vulnerability of the regional order but have
struggled to define a comprehensive and coherent strategy for the region. This report proposes
one such strategy.
The report assesses U.S. interests in the Indo-Pacific, analyzes the strategic environment, and
inventories the strategic resources available to the United States. As much as possible, it is based on
empirical data, the assessments of experts on the region, and the findings of rigorous social science
research. Some will no doubt disagree with its findings and recommendations. If the report at least
provokes serious thinking and discussion by policymakers and opinion leaders, however, then it
will have served its purpose.
It should also be acknowledged that the ongoing Covid-19 pandemic, which began as the
research for this project was reaching its end, has the potential to fundamentally alter some of
the assumptions and estimates in this report. If so, some elements of the strategy might need
to be adjusted or rethought. Regardless of the specific long-term implications of the pandemic,
however, it seems clear that the Indo-Pacific will not become less important to the United States.
Indeed, as of May 2020, the primary effect of the pandemic appears to have been to accelerate the
trends and challenges identified in the report. Strategies must always adjust and adapt to changing
circumstances, but the main findings of this report appear likely to remain valid for some time.
The idea for this project came from Allan Song of the Smith Richardson Foundation. Originally
I approached him with a proposal to design a defense strategy for the Indo-Pacific. He encouraged
me to think bigger and instead design a whole-of-government, grand strategy for the region.
The resulting project was significantly more challenging, but I hope it also is significantly more
useful. The need for a coherent, comprehensive U.S. strategy for the Indo-Pacific, moreover, has
only become more urgent since those initial conversations. I am thankful, therefore, to Al for
pushing me to do a more ambitious project than I originally intended. I am grateful to him and
the Smith Richardson Foundation for believing that I could produce something worthwhile and
for providing the financial support for me to do so. Nonetheless, their sponsorship of this project
should not be interpreted as implying endorsement of its findings.
I owe equal gratitude to the National Bureau of Asian Research (NBR) for agreeing to host the
project and publish this report. I am especially grateful to Tiffany Ma, then of NBR, for handling
the initial arrangements that made this partnership possible; to Brian Franchell, then of NBR,
for handling the contractual formalities, overseeing the research assistance NBR provided during
the initial stages of the project, and organizing the first few advisory committee meetings; and
to Melissa Newcomb for taking over the organization of the advisory committee meetings after
Brian left NBR, overseeing the publication process, and organizing the launch of the report.
v
I am grateful as well to the numerous staff members at NBR who provided research assistance
and helped Brian and Melissa set up the advisory committee meetings. I am also grateful to Roy
Kamphausen, president of NBR, both for supporting this project and for agreeing to be a member
of the advisory committee. Finally, I am grateful to Josh Ziemkowski and his team for their superb
and surprisingly painless (for me, at least) editorial and production work.
As alluded to in the preceding paragraph, at the suggestion of the Smith Richardson Foundation
I recruited an advisory committee for this project consisting of recognized experts on different
aspects of the Indo-Pacific region. In addition to Roy Kamphausen, these were Richard Bush of the
Brookings Institution, Abraham Denmark of the Wilson Center, Michael Green of the Center for
Strategic and International Studies, Satu Limaye of the East-West Center, Michael Lostumbo of the
RAND Corporation, Thomas Mahnken of the Center for Strategic and Budgetary Assessments,
Meredith Miller of the Albright Stonebridge Group, and Amy Searight of the Center for Strategic
and International Studies. All of them gave generously of their time and expertise and received
only nominal compensation, consisting mainly of prosciutto, cheese, and crackers at our evening
sessions. Particular thanks are owed to Michael Lostumbo and Thomas Mahnken, who also
reviewed a complete draft of the revised report and provided extremely valuable comments and
criticism. None of the advisory committee members, of course, should be held responsible for the
ultimate findings of the report or any errors it may contain.
In addition to the members of the advisory committee, this project also benefited from the
expertise of a number of regional experts who agreed to be interviewed as part of my research.
These include Elizabeth Economy of the Council on Foreign Relations; Lindsey Ford, now of the
Brookings Institution; Joshua Kurlantzick of the Council on Foreign Relations; Walter Lohman
of the Heritage Foundation; Laura Rosenberger of the German Marshall Fund; Richard Rossow
of the Center for Strategic and International Studies; James Schoff of the Carnegie Endowment
for International Peace; Adam Segal of the Council on Foreign Relations; Yun Sun of the Stimson
Center; Ashley Tellis of the Carnegie Endowment for International Peace; and Joshua White of
the Johns Hopkins School of Advanced International Studies. All of them provided valuable
information and insights, but none should be in any way held responsible for the findings of
this report.
Roger Cliff
vi NBR SPECIAL REPORT • JUNE 2020

EXECUTIVE SUMMARY
This report describes U.S. interests in the Indo-Pacific, challenges and opportunities the
U.S. will likely face in the region over the next decade, the resources available to the U.S. for
protecting and advancing its interests, and a recommended strategy for doing so.
MAIN ARGUMENT
The Indo-Pacific is a region of critical importance to the U.S., but one in which it is likely
to face major challenges in coming years. China will be both the dominant economy and the
dominant military power (other than the U.S.) in the region and will continue its efforts to
take control over Taiwan, the South China Sea, and the Senkaku Islands. Beijing will also
continue to infiltrate and subvert the political systems of countries in the Indo-Pacific and
elsewhere in the world. Meanwhile, North Korea will continue to increase its capability to
attack the U.S. with nuclear weapons, and state failure in North Korea is a possibility over
the next decade. Other adverse events could occur as well, including interstate conflict, new
internal conflicts, democracies becoming autocracies, and Islamist regimes coming to power.
In addition, unusually hot weather and floods will become more frequent as a result of global
climate change, and the Indo-Pacific will be a major source of environmental pollution
and greenhouse gas emissions. At the same time, the Indo-Pacific presents major strategic
opportunities for the U.S., which still enjoys significant strengths. The U.S. possesses more
human capital than any country in the world, has the world’s best technological capabilities,
and has by far the world’s most capable military. Perhaps its greatest asset in the region,
however, is its democratic allies, particularly Japan, South Korea, and Australia. As a result,
U.S. Indo-Pacific strategy should focus on strengthening ties with the democracies of the
region and making those democracies stronger and more secure.
POLICY IMPLICATIONS
To protect and advance its interests in the Indo-Pacific, the U.S. should adopt a strategy
toward the region that includes the following main elements:
• Strengthening U.S. relations with democracies
• Promoting the economic growth of democracies
• Strengthening the defense capabilities of democracies
• Helping end internal conflicts in democracies
• Helping strengthen democratic institutions in all Indo-Pacific countries
• Reducing external military threats to democracies
• Strengthening the capabilities of the U.S. to defend democracies
• Promoting democracy and human rights in nondemocratic countries
• Continuing to provide humanitarian assistance and disaster relief
• Providing economic assistance to countries during crises
• Working with all Indo-Pacific nations to reduce pollution and greenhouse gas emissions
chapter 1
Introduction
1
T
he Indo-Pacific is a region of critical importance to the United States and one in which
the country is likely to face major challenges in coming years. Washington has lacked
a coherent strategy for the region, however, and its responses to date to the growing
challenges in the region have been marginal and piecemeal. The United States needs a
comprehensive strategy for the Indo-Pacific that is based on a rigorous analysis of the strategic
dynamics of the region and a realistic assessment of the resources available for protecting and
advancing U.S. interests. This report presents such a strategy.
This first chapter examines why a strategy for the Indo-Pacific is needed and specifies the
principal interests that the strategy should be designed to protect and advance. Chapter 2 then
analyzes long-term regional trends in demographics, economic growth, trade, organized conflict
and other forms of violence, political change, defense spending, and environmental change. Next,
the report analyzes and describes the national strategies of six key actors in the region whose
actions have the potential to significantly affect U.S. interests: China, India, Japan, Indonesia,
North Korea, and Taiwan. The fourth chapter then assesses the prospects for different types of
major events occurring in the region in coming years, including wars and peace agreements, the
emergence and resolution of internal conflicts, regime changes, financial crises, natural disasters,
and refugee crises. Next, chapter 5 identifies and characterizes the tangible and intangible
resources available to the United States for managing the challenges and opportunities that will
likely arise in the region as a result of these trends, actors, and events. Finally, the concluding
chapter describes a strategy for using those resources to protect and advance U.S. interests and
identifies specific actions and policies for implementing that strategy.
The Need for a Strategy

More than half of the world’s population resides in the Indo-Pacific, including over two billion
people (more than half the regional population) who are living under democracy (see Figure 1).1
The region also generates a third of the world’s economic output, more than any other region of
the world. The United States has more trade with the Indo-Pacific than with any other region, and
three of its most important allies (Japan, South Korea, and Australia) are located there.2
The United States will likely face severe challenges in the Indo-Pacific in coming years. China,
an authoritarian country that is increasingly repressive, has an economy that is already larger than
that of the United States and is expected to further increase its lead over the next decade. China
spends more on its military than any country other than the United States, and its government has
numerous territorial disputes in the region, including a claim that the entire independent country
of Taiwan should be part of China. Moreover, Beijing asserts the right to use force to resolve these
disputes. In addition to its territorial claims, China has also been covertly infiltrating the societies
1 For the purposes of this project, the Indo-Pacific is defined as comprising East Asia, Southeast Asia, Oceania, and South Asia except
for Pakistan and Afghanistan. This definition is consistent with the description of the region in the 2017 U.S. National Security Strategy
as stretching “from the west coast of India to the western shores of the United States.” White House, National Security Strategy of the
United States of America (Washington, D.C., December 2017), 45–46, https://www.whitehouse.gov/wp-content/uploads/2017/12/
NSSFinal-12-18-2017-0905.pdf. For a discussion of the value of conceiving of this area as a single region, see Rory Medcalf, “Indo-Pacific
Visions: Giving Solidarity a Chance,” Asia Policy 14, no. 3 (2019): 79–95.
2 UN Population Division, “World Population Prospects 2019,” https://population.un.org/wpp; International Monetary Fund (IMF), World
Economic Outlook Database, October 2019, https://www.imf.org/external/pubs/ft/weo/2019/02/weodata/index.aspx; and IMF, Direction of
Trade Statistics, https://data.imf.org/?sk=9D6028D4-F14A-464C-A2F2-59B2CD424B85. In 2018, Japan, South Korea, and Australia ranked
fourth, fifth, and seventh, respectively, in defense spending among U.S. treaty allies. Stockholm International Peace Research Institute
(SIPRI), SIPRI Military Expenditure Database, https://www.sipri.org/databases/milex; and “Polity IV Annual Time-Series, 1800–2018,”
INSCR Research Data Page, Center for Systemic Peace, http://www.systemicpeace.org/inscrdata.html.
CHAPTER 1 u CLIFF
3
and political systems of numerous countries, including the United States, in an effort to influence
their policies in ways that are in China’s interest.3
Another challenge that the United States will face is North Korea’s acquisition of nuclear
weapons and delivery systems, including intercontinental ballistic missiles (ICBMs) capable of
reaching the United States. Although it would be suicidal, and is therefore unlikely, for North
Korea to launch an unprovoked nuclear attack on the United States, possession of these weapons
increases Pyongyang’s ability to engage in other forms of aggression, which could include the
f i g u r e 1 Map of the Indo-Pacific
Nor th Pacific Ocean
Indian Ocean
South Pacific Ocean
3 SIPRI estimates that China’s total military expenditure in 2018 was $250 billion. The next highest countries were Saudi Arabia, at $68 billion;
India, at $67 billion; France, at $64 billion; and Russia, at $61 billion. See SIPRI Military Expenditure Database.
4 NBR SPECIAL REPORT u JUNE 2020

use of nuclear weapons against U.S. allies.4 In addition, if the North Korean state, which is built
around a single family, were to collapse or split into warring factions, its possession of nuclear
weapons greatly increases the dangers that would result from such an event.
U.S. interests in the Indo-Pacific will be challenged in other ways. Democracy, after spreading
rapidly in the region in the 1990s and the first half of the 2000s, has been in retreat in recent years.
Thailand, a U.S. treaty ally, was a democracy prior to 2006 but experienced a military coup in that
year and again in 2014, and democracy has not been restored since.5 Similarly, Bangladesh was a
democracy from 1991 to 2006, but since that time the ruling Awami League has been tightening
its hold on power. After the party overwhelmingly won parliamentary elections in 2018 that were
marred by violence and rigged in its favor, Bangladesh can no longer be regarded as a democracy.6
Meanwhile, other countries in the region, such as the Philippines, Indonesia, and India, although
they remain democracies, have been becoming increasingly illiberal.7
Major economic challenges and opportunities are arising in the Indo-Pacific as well. In
January 2017 the United States withdrew from the Trans-Pacific Partnership (TPP), a free trade
agreement (FTA) involving seven Indo-Pacific countries together with five countries from the
Western Hemisphere that would have encompassed nearly 40% of the world’s economy. Despite
the U.S. withdrawal, however, in the following year the other eleven countries, representing more
than $11 trillion in economic activity, reached a similar agreement called the Comprehensive
and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Meanwhile, China has
been promoting a broader (albeit shallower) FTA called the Regional Comprehensive Economic
Partnership (RCEP), which will include fifteen Indo-Pacific countries with a collective GDP of
$25 trillion. Like all FTAs, these arrangements will increase trade among their members and
decrease trade with nonmembers. The emergence of these two agreements presents the United
States with the opportunity to join one or both of them and benefit from the advantages
of membership. If it chooses not to do so, it risks diminished access to the growing economies
that these FTAs encompass.8
As these examples suggest, the Indo-Pacific is in danger of evolving from being a benign region
that is primarily a source of benefits for the United States to one that is a source of threats to
U.S. interests. It is conceivable that, over time, the region could become militarily, politically, and
economically dominated by the authoritarian regime in Beijing; that key U.S. allies such as Japan,
South Korea, and Australia could drift away; that the United States could no longer have free
access to the most important economic region of the world; and that the region could feature an
4 Even before North Korea acquired an operational nuclear capability, successive regimes have repeatedly demonstrated a willingness to
use lower levels of lethal military force. For example, in August 2015, North Korean soldiers sneaked into the South Korean half of the
Demilitarized Zone separating the two countries and planted land mines near one of the South’s military guard posts, maiming two South
Korean soldiers who triggered them. See Choe Sang-Hun, “South Korea Accuses the North after Land Mines Maim Two Soldiers in DMZ,”
New York Times, August 10, 2015.
5 Freedom House, “Freedom in the World 2020: Thailand,” 2020. Thailand held parliamentary elections in March 2019, and the current prime
minister is nominally a civilian, but he was commander in chief of the Royal Thai Army at the time it overthrew the civilian government in
2014 and retired from the army only after being appointed prime minister later that year. His re-election as prime minister in 2019 came
after a parliamentary election that was widely viewed as having been rigged to ensure his party’s victory. See “The Leader of the Thai Junta
Tortures the Rules to Remain in Power,” Economist, June 6, 2019, https://www.economist.com/asia/2019/06/06/the-leader-of-the-thai-junta-
tortures-the-rules-to-remain-in-power.
6 Freedom House, “Freedom in the World 2019: Bangladesh,” 2019; and “Polity IV Annual Time-Series, 1800–2018.”
7 Freedom House, “Freedom in the World 2006: Philippines,” 2006; and Freedom House, “Freedom in the World 2014: Indonesia,” 2014.
8 See IMF, World Economic Outlook Database; “What on Earth Is the CPTPP?” Economist, March 12, 2018, https://www.economist.com/
the-economist-explains/2018/03/12/what-on-earth-is-the-cptpp; Jack Caporal and Jonathan Lesh, “The CPTPP: (Almost) One Year Later,”
Center for Strategic and International Studies (CSIS), November 5, 2019, https://www.csis.org/analysis/cptpp-almost-one-year-later; and
William Alan Reinsch, Jack Caporal, and Lydia Murray, “At Last, an RCEP Deal,” CSIS, December 3, 2019, https://www.csis.org/analysis/
last-rcep-deal.
CHAPTER 1 u CLIFF
5
unstable or fragmented government in North Korea that is in possession of nuclear ICBMs capable
of reaching the United States.
Despite these transformative changes that have long been developing in the Indo-Pacific,
successive U.S. administrations have struggled to define an effective strategy for the region. In
2011 the Obama administration announced a policy of rebalancing to Asia. Part of this policy
was an effort to reallocate U.S. diplomatic, economic, and military resources, which had long been
focused on Europe and the Middle East, so that they were consistent with the region’s increased
importance to the United States. In addition, the policy included measures to strengthen U.S.
alliances and partnerships in the region and to increase active participation in regional institutions
such as the Association of Southeast Asian Nations (ASEAN), the East Asia Summit, and the
Asia-Pacific Economic Cooperation (APEC). In the economic realm, the Obama administration
pushed the formation of the TPP, signing an agreement with the other eleven countries in 2016.9
Although these efforts were certainly significant, they were not accompanied by a publicly
articulated vision of what specific challenges and opportunities in the region the United States was
facing, much less what underlying strategy was informing them. More importantly, none was an
effective response to the most critical challenges facing the region, such as the growing military
and political threat from China or North Korea’s acquisition of nuclear weapons and ICBMs.10
The Trump administration also lacks a compelling strategy toward the Indo-Pacific. Although
it has never explicitly articulated its strategy, in late 2019 the State Department issued a report
self-described as an “implementation update” on the strategy. The report summarizes U.S.
efforts in five areas: engaging partners and regional institutions, enhancing economic prosperity,
championing good governance, ensuring peace and security, and investing in human capital.
As with the Obama administration’s rebalance policy, however, what overarching strategy informs
these efforts is unclear. The specific activities described in the report, moreover, do not appear to be
commensurate with the severity of the challenges in the region. The only references to North Korea,
for example, are a statement that the United States is increasing support to its Indo-Pacific partners
in defending their computer networks and countering malicious cyberactivities by North Korea
and other countries, and a statement that the United States counters North Korean proliferation
activities. No mention is made of efforts to persuade Pyongyang to relinquish its nuclear weapons
and ICBMs.11
Similarly, the only initiatives mentioned in the report that appear to be designed to counter
China’s growing power and influence are the aforementioned support to Indo-Pacific partners
9 See Daniel R. Russel, “U.S. Policy Towards East Asia and the Pacific” (remarks at the Baltimore Council on Foreign Affairs, Washington,
D.C., May 29, 2014), https://2009-2017.state.gov/p/eap/rls/rm/2014/05/226887.htm. Note that, although this speech is titled “U.S. Policy
Towards East Asia and the Pacific,” it includes reference to India, implying that the region toward which the policy was directed was
comparable to the Indo-Pacific concept employed in this report.
10 The rebalance policy was said to also entail “engaging with emerging powers,” including China (although not North Korea). “Engaging
with emerging powers” sounds like a description of routine diplomatic activity, however, and so cannot be considered a significant
response to the growing threat from China. In a subsequent speech, Assistant Secretary Russel, moreover, cited, as examples of the results
of this engagement, a commitment from President Xi Jinping “that China will not conduct or knowingly support cyber-enabled theft
for commercial gain,” a statement by Xi that “China has no intention of militarizing its islands in the Spratlys,” and the delivery to Xi of
a “loud and clear” message on the constriction of political space and human rights in China, which the Obama administration was said
to “hope he [took] to heart.” See Daniel R. Russel, “U.S.-Asia Policy Update” (remarks at the Asia Society, New York, November 4, 2015),
https://2009-2017.state.gov/p/eap/rls/rm/2015/11/249201.htm. A claim that China has not knowingly conducted or supported cyber-
enabled theft for commercial gain since 2015 would be implausible, and the statement that “China has no intention of militarizing its islands
in the Spratlys” was demonstrated to be a lie less than three years later. See Steven Stashwick, “China Deploys Long-Range Anti-ship and
Anti-air Missiles to Spratly Islands for First Time,” Diplomat, May 5, 2018, https://thediplomat.com/2018/05/china-deploys-long-range-
anti-ship-and-anti-air-missiles-to-spratly-islands-for-first-time. And the delivery of a “loud and clear” message, along with a hope that the
message was taken to heart by the leader of an oppressive dictatorship, cannot be regarded as an example of effective action.
11 U.S. Department of State, A Free and Open Indo-Pacific: Advancing a Shared Vision (Washington, D.C., November 2019), 22–23, https://
www.state.gov/wp-content/uploads/2019/11/Free-and-Open-Indo-Pacific-4Nov2019.pdf.

in defending their computer networks and countering malicious cyberactivities; the approval
of weapons sales to Taiwan; programs to provide maritime security training, equipment, and
advice to countries in the region; and verbal admonishments directed at China. The latter include
repeatedly expressing concern over Beijing’s actions to bully Taiwan, publicly calling on China to
halt its repression of Muslim minorities, urging the Communist Party of China to refrain from
interfering in the selection of religious leaders by the Tibetan community, and cautioning Beijing
that it must uphold its commitments to maintaining Hong Kong’s autonomy and civil liberties.12
The changes underway in the Indo-Pacific require a more comprehensive and effective response
than these minimal, piecemeal efforts. The United States needs a strategy for the region that
identifies the emerging challenges and opportunities for U.S. interests, assesses the resources
available for protecting and advancing these interests, and then describes a set of concrete actions
for the United States to take.
U.S. Interests in the Indo-Pacific13

To have a coherent strategy for the Indo-Pacific, the United States must first identify its interests
in the region. As with any part of the world, the number of U.S. interests in the Indo-Pacific is
large. An effective strategy should focus on a limited number of the most important interests. This
report asserts that the primary U.S. interests in the region are (in rough order of importance):
protection of the United States against direct threats; maintenance of the security and strength
of U.S. allies; continued access to an economically dynamic region; regional peace and stability;
prevention of the spread of nuclear, biological, and chemical weapons; human rights, freedom, and
democracy; and a healthy natural environment.
Protection of the United States against direct threats originating from the Indo-Pacific. A primary
responsibility of any national government is protecting its people from foreign attack. Given the
distance between the United States and the countries of the Indo-Pacific, no nation in the region
poses a plausible threat to actually invade the United States or its territories.14 However, China
and now North Korea possess missiles capable of reaching U.S. territories in the Pacific as well as
the U.S. mainland.15 In addition, Indo-Pacific countries or nonstate actors could covertly dispatch
personnel or induce U.S. residents to carry out attacks on U.S. territory or target U.S. citizens
living or traveling in the region.16
Of particular concern would be attacks employing nuclear, biological, or chemical weapons,
because of the much greater number of deaths and injuries that could result from such attacks,
12 U.S. Department of State, A Free and Open Indo-Pacific, 8, 10, 22, 23.
13 This section draws in part on the Commission on America’s National Interests, “America’s National Interests,” July 2000, available at https://
www.belfercenter.org/sites/default/files/legacy/files/amernatinter.doc; U.S.-China Economic and Security Review Commission, “2016 Annual
Report to Congress,” November 2016, 475–77, https://www.uscc.gov/Annual_Reports/2016-annual-report-congress; Robert D. Blackwill,
“Defending Vital U.S. Interests: Policy Prescriptions for Trump,” Foreign Policy, January 25, 2017, http://foreignpolicy.com/2017/01/25/
defending-vital-u-s-interests-policy-prescriptions-for-trump; and Charles Boustany and Richard J. Ellings, “China and the Strategic Imperative
for the United States,” Asia Policy 13, no. 1 (2018): 47–67.
14 The Indo-Pacific nation whose territory is closest to U.S. territory appears to be Samoa, approximately 45 miles by sea from American Samoa.
Samoa has no military forces, however. See Central Intelligence Agency, The World Factbook, https://www.cia.gov/library/publications/the-
world-factbook.
15 In addition to the states of Alaska (including the Aleutian Islands) and Hawaii, U.S. territories in the Pacific with permanent populations
are Guam, the Northern Mariana Islands, and American Samoa. The United States also controls eight Pacific islands and atolls that lack
permanent populations. See “Definitions of Insular Area Political Organizations,” Office of Insular Affairs, U.S. Department of the Interior,
https://www.doi.gov/oia/islands/politicatypes.
16 Estimates of the number of U.S. citizens living or traveling in the Indo-Pacific at any given time were not found.
CHAPTER 1 u CLIFF
7
the long-term contamination they would cause, and the taboo they would break.17 Nuclear and
biological weapons are not known to have been used in warfare since World War II.18 Any use of
these weapons, therefore, would significantly weaken the global norm against their use, increasing
the likelihood that they would be used again in the future. Chemical weapons are generally less
lethal than nuclear or biological weapons and have been used on multiple occasions since World
War II.19 Nonetheless, almost all nations have acceded to the Chemical Weapons Convention,
which outlaws the production, stockpiling, and use of chemical weapons.20 Chemical weapons
attacks on the United States (or any other country) would further weaken the taboo against their
use as well.
Threats to the United States emanating from the Indo-Pacific region could also be nonphysical.
Cyberattacks could cause severe damage to the U.S. economy or infrastructure. In addition,
countries in the Indo-Pacific could commit political aggression against the United States by
attempting to undermine Americans’ confidence in democracy or subvert the U.S. political system.21
Maintenance of the security and strength of U.S. allies in the Indo-Pacific. The security of the
United States depends not just on its own strength but also on that of its allies around the world.
As measured by annual defense spending, three of the United States’ seven most important treaty
allies—Japan, South Korea, and Australia—are located in the Indo-Pacific. The combined defense
spending of U.S. allies in the region, moreover, represents roughly a third of the total defense
spending of all U.S. allies throughout the world.22 In addition, the Indo-Pacific is home to several
democracies, such as India, Indonesia, and Taiwan, that are not formal treaty allies but share
interests with the United States and are potential informal allies or coalition partners.
Continued access to an economically dynamic Indo-Pacific. One-third of world economic output
is generated in the Indo-Pacific, which has been by far the fastest-growing economic region of
the world in recent decades. Between 1990 and 2018, for example, the “emerging economies” of
the Indo-Pacific (i.e., the Indo-Pacific countries excluding Japan, South Korea, Taiwan, Australia,
Hong Kong, New Zealand, Singapore, and Macao) grew by 773%, compared with 66% for the
European Union, 65% for emerging and developing Europe, 116% for Latin America and the
Caribbean, 210% for the Middle East and Central Asia, and 205% for Sub-Saharan Africa.23 More
than one-third of U.S. foreign trade is currently with the Indo-Pacific, with combined U.S. imports
and exports to and from the region representing more than $1.6 trillion annually, around 8% of
17 China possesses nuclear weapons but is not believed to currently possess operational biological or chemical weapons. See “China,” Nuclear
Threat Initiative, updated May 2019, https://www.nti.org/learn/countries/china. North Korea is believed to possess all three types of weapons.
See “North Korea,” Nuclear Threat Initiative, updated August 2019, https://www.nti.org/learn/countries/north-korea.
18 See Friedrich Frischknecht, “The History of Biological Warfare,” EMBO Reports 4, no. S1 (2003): S47–52, https://www.ncbi.nlm.nih.gov/
pmc/articles/PMC1326439.
19 Aisha Majid, “A ‘100 Year Taboo’? One Graphic That Shows How Chemical Weapons Have Been Used over Time,” Telegraph, March 21,
2018, https://www.telegraph.co.uk/news/0/one-hundred-year-taboo-one-graphic-shows-chemical-weapons-have.
20 “Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on Their Destruction,”
available from UN Treaty Collection, https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXVI-3&chapter=26&lang=en.
North Korea is one of three nations that have not ratified the convention.
21 As the coronavirus pandemic shows, infectious diseases emerging from the Indo-Pacific can also be a threat to the health of Americans. If an
epidemic or pandemic were the result of intentional human action, it would be considered a biological weapon attack. Otherwise, although
such diseases may be more likely to emerge in the Indo-Pacific than in other parts of the world, this report regards preventing and combating
them to properly be an element of a global U.S. strategy, not a specific strategy for the Indo-Pacific region.
22 SIPRI Military Expenditure Database. Aside from the defense treaties with Japan, South Korea, and Australia, other U.S. defense treaties
include the North Atlantic Treaty Organization (NATO), the U.S.-Philippine Mutual Defense Treaty, and the 1954 Manila Pact to which
the United States and Thailand are signatories, along with Australia, France, New Zealand, the Philippines, and Britain. See “U.S. Collective
Defense Arrangements,” U.S. Department of State, https://2009-2017.state.gov/s/l/treaty/collectivedefense//index.htm.
23 See IMF, World Economic Outlook Database.

U.S. GDP. U.S. companies also have roughly a trillion dollars in direct investment in the region.24
In addition, many goods produced in the United States are dependent on inputs that are produced
in the Indo-Pacific. As the region further grows and develops economically and technologically,
it has the potential to be an increasing source of material prosperity for the United States.25 Thus,
the United States has an interest in the continued economic growth and development of the
Indo-Pacific, provided the United States remains able to access that growth and development
through trade, investment, and the exchange of technology.
Regional peace and stability. The United States has an interest in peace and stability in the
Indo-Pacific. A lack of peace and stability could negatively affect U.S. interests in multiple ways. If
a conflict were to involve a U.S. ally, it could result in the weakening or even loss of that ally. Even
if the ally ultimately recovered from the conflict or instability, its capabilities would be unavailable
to the United States while it was affected. Even turmoil that does not directly involve U.S. allies,
moreover, could disrupt overall economic growth and commerce, cause population displacement,
and spill over into other countries, none of which are in the interests of the United States.
Prevention of the spread of nuclear, biological, and chemical weapons. Three countries in the
Indo-Pacific are known to possess nuclear weapons: China, India, and North Korea, and one of
them—North Korea—is also believed to possess biological and chemical weapons.26 Everything
else being equal, the fewer countries that possess such weapons, the less likely they are to be
used, intentionally or accidentally, and the less likely they are to fall into the hands of nations or
nonstate actors that might use them against the United States or its allies. Thus, the United States
has an interest in preventing additional countries in the Indo-Pacific from acquiring nuclear,
biological, and chemical weapons and in preventing those countries that already possess them
from transferring such weapons, or the equipment or knowledge needed to manufacture them, to
other countries. In addition, given North Korea’s demonstrated proclivity to conduct attacks on
other nations, and the possibility that its government could fail at some point in the future, the
United States has an interest in North Korea, in particular, relinquishing these weapons.
Human rights, freedom, and democracy. The United States has both a normative and a material
interest in human rights, freedom, and democracy. In the normative realm, the United States is a
nation that is founded on the belief that all the people of the world are entitled to human rights,
freedom, and democracy. Their spread, however, is also in the material interest of the United States.
In particular, a robust body of research indicates that mature democracies (that is, countries that
do not simply hold periodic elections but in which freedom and human rights are widely enjoyed
and protected) almost always resolve their disputes peacefully and rarely, if ever, go to war with
each other.27 In addition, such countries generally tend to support and strengthen democracy in
each other, while authoritarian countries often seek to undermine democracy in other countries.
Thus, a world in which more countries are democracies is in the direct interest of the United States.
24 IMF, World Economic Outlook Database; U.S. Census Bureau, “Monthly U.S. International Trade in Goods and Services, December 2019,”
Press Release, https://www.census.gov/foreign-trade/Press-Release/current_press_release/index.html; and U.S. Department of Commerce,
Bureau of Economic Analysis, “U.S. Direct Investment Abroad: Balance of Payments and Direct Investment Position Data,” https://www.bea.
gov/international/di1usdbal.htm. Figures on trade in goods and services are based on exports and imports with seven major Indo-Pacific
trading partners: China, Japan, South Korea, India, Taiwan, Singapore, and Hong Kong.
25 This trade data includes trade in both goods and services. IMF, World Economic Outlook Database; and IMF, Direction of Trade Statistics.
26 “Country Profiles,” Nuclear Threat Initiative, https://www.nti.org/learn/countries.
27 See, for example, Daniel S. Geller and J. David Singer, Nations at War: A Scientific Study of International Conflict (Cambridge: Cambridge
University Press, 1998), 85–87.
CHAPTER 1 u CLIFF
9
A healthy natural environment in the Indo-Pacific. The quality of the Indo-Pacific’s natural
environment indirectly affects the interests of the United States through its impact on the health
of the people and economies of the region. It also affects the United States more directly. Based
on the estimates of an international group of researchers, for example, Indo-Pacific countries will
contribute approximately 30% to the global rise in temperature by the year 2100.28 Similarly, a
2015 study estimated that, of the world’s oceanic plastic waste (a major type of pollution in the
oceans), approximately two-thirds originates in the region.29 The Indo-Pacific is also a significant
source of air pollution, not just in Asia but elsewhere in the world as well. In the western United
States, for example, according to one study, springtime levels of ground-level ozone, which is one
of the two most important types of air pollution (the other being particulate matter), have actually
increased since 1990, despite the fact that U.S. emissions of nitrogen oxides, the primary cause
of ground-level ozone, were reduced by half over that period. This is because the decrease in U.S.
emissions of nitrogen oxides has been more than offset by an increase in Asian emissions that are
carried through the stratosphere to the western United States.30
28 Data is from the website of the Ad Hoc Group for the Modelling and Assessment of Contributions of Climate Change (MATCH), http://
www.match-info.net. Data includes estimates of the effects of carbon dioxide, methane, and nitrogen oxides produced by the energy,
industry, agriculture, and waste sectors and as a result of land-use change and forestry. It does not include estimates of the effects of
hydrofluorocarbons, perfluorocarbons, or sulfur hexafluoride, whose total cumulative historical emissions amount to about 0.5% of total
cumulative historical emissions of carbon dioxide, methane, and nitrogen oxides in terms of their effect on global climate change, or of sulfate
aerosols, which have a significant cooling, rather than warming, effect. See Niklas Höhne et al., “Contributions of Individual Countries’
Emissions to Climate Change and Their Uncertainty,” Climatic Change 106 (2011): 359–91; and H. Damon Matthews et al., “National
Contributions to Observed Global Warming,” Environmental Research Letters 9, no. 1 (2014).
29 An estimated 4.8 to 12.7 million metric tons of plastic waste enter the oceans each year. Eleven Indo-Pacific nations are estimated to
contribute a total of 3.22 to 8.57 million metric tons. See Jenna R. Jambeck et al., “Plastic Waste Inputs from Land into the Ocean,” Science
347, no. 6223 (2015): 768–71.
30 Bill Chappell, “Smog in Western U.S. Starts Out as Pollution in Asia, Researchers Say,” NPR, March 3, 2017, https://www.npr.org/sections/
thetwo-way/2017/03/03/518323094/rise-in-smog-in-western-u-s-is-blamed-on-asias-air-pollution; and Meiyun Lin et al., “U.S. Surface
Ozone Trends and Extremes from 1980 to 2014: Quantifying the Roles of Rising Asian Emissions, Domestic Controls, Wildfires, and
Climate,” Atmospheric Chemistry and Physics 17 (2017): 2943–70, https://www.atmos-chem-phys.net/17/2943/2017/acp-17-2943-2017.pdf.

chapter 2
Long-Term Regional Trends
11
W
hile the complexity and indeterminacy of human behavior mean that the future
is impossible to predict with any precision, a strategy for the Indo-Pacific should
account for overall conditions and potential developments in the region in coming
years. This includes regional demographic, economic, political, military, and
environmental trends. It also includes the behavior of key actors and significant events that could
occur. This chapter examines regional trends, while the subsequent two chapters will examine the
behavior of key actors and significant potential events.
Regional Trends
The subsections that follow describe recent and projected future trends in the region in
demographics, economic growth, trade, conflict and violence, political change, defense spending,
and the environment.
Demographics
The UN Population Division projects that, assuming current demographic trends continue, the
total population of the Indo-Pacific region will grow by approximately 10% between 2020 and
2050—from just under 4.0 billion to about 4.4 billion—with the population peaking around 2047
and beginning to fall thereafter (see Figure 1).1 The Indo-Pacific will remain the most populous
region in the world throughout this period, although as a percentage of the total world population
it will decline from approximately 51% in 2020 to roughly 45% in 2050.
Within the region there will be a shift in the relative population sizes of the two most populous
subregions. Currently, East Asia (comprising China, Japan, North and South Korea, Taiwan, and
Mongolia) is the most populous subregion, with 42% of the region’s total population. By around
2027, however, South Asia will surpass it. The total population of East Asia will increase by only
about 1% between 2020 and 2030, whereas the populations of South Asia and Southeast Asia will
grow by about 9%. In particular, China’s population is projected to peak at 1.46 billion around
2031 and decline thereafter, whereas India’s population is projected to surpass China’s in 2027 and
reach 1.64 billion in 2050 (see Figure 2).
The populations of the other large countries in the region are generally expected to grow
during 2020–30. For example, Indonesia, the third most populous country in the region, is
expected to grow by roughly 9%, from approximately 275 million in 2020 to 300 million in 2030.
The populations of Bangladesh, the Philippines, and Vietnam are expected to grow significantly
as well. An exception is Japan, currently the fifth most populous regional country (after China,
India, Indonesia, and Bangladesh), whose population is projected to decline by approximately
5% between 2020 and 2030.
Economic Growth
If measured in a way that accounts for the differences in prices of comparable goods in different
countries (known as “purchasing power parity,” or PPP), the economies of the Indo-Pacific region
collectively grew by more than 300% over the 25 years between 1993 and 2018, an average annual
1 The demographic data in this section is from UN Population Division, “World Population Prospects 2019,” https://population.un.org/wpp.
The discussion in this section is based on the “medium variant” projection for each country.
CHAPTER 2 u CLIFF
13
f i g u r e 1 Projected total population of the Indo-Pacific (2020–50)
f i g u r e 2 Population projections for China and India (2020–50)

rate of 5.7%.2 In 2019 the International Monetary Fund forecast that they will grow at an only
slightly lower average rate of 5.4% per year between 2018 and 2024 (see Figure 3).3
The economy of the Indo-Pacific is dominated by China. Figure 4 shows the ten largest
economies in the region as measured in PPP in 2018. As the figure shows, China’s economy was
larger than the economies of the next seven countries combined.4 This dominance is expected to
continue well into the future. Figure 5 shows estimates of the sizes of the ten largest economies
in the Indo-Pacific region in 2030. As can be seen, although India’s economy is projected to
grow more quickly than China’s, at the end of the decade the Chinese economy will still be by
far the largest in the region, nearly twice the size of India’s and larger than the next six largest
economies combined.5
f i g u r e 3 Total GDP growth of the Indo-Pacific (1993–2024)

GDP (2016 PPP dollars, trillions)
2 This report uses PPP when measuring and comparing the sizes of national economies. By taking into account that many goods and services
in developing countries are less expensive than comparable goods and services (e.g., a bowl of rice) in economically advanced countries,
PPP enables more accurate comparisons of standards of living and the overall sizes of economies. See “Fundamentals of Purchasing Power
Parities,” International Comparison Program, World Bank, http://pubdocs.worldbank.org/en/332341517441011666/PPP-brochure-2017-
webformat-rev.pdf.
3 International Monetary Fund (IMF), World Economic Outlook Database, April 2019, https://www.imf.org/external/pubs/ft/weo/2019/01/
weodata/index.aspx.
4 Ibid..
5 John Hawksworth, Hannah Audino, and Rob Clarry, “The Long View: How Will the Global Economic Order Change by 2050?” PwC, 2017,
https://www.pwc.com/gx/en/world-2050/assets/pwc-the-world-in-2050-full-report-feb-2017.pdf.
CHAPTER 2 u CLIFF
15
f i g u r e 4 Ten largest economies of the Indo-Pacific in 2018
f i g u r e 5 Projected ten largest economies in the Indo-Pacific in 2030

Trade
Trade in the Indo-Pacific grew even more rapidly than the regional economies did during
1993–2008. After adjusting for inflation and fluctuations in the exchange rate, trade increased by an
average of 5.85% per year (see Figure 6).6 As can be seen, the rate at which trade has been growing
appears to have slowed over the past decade, even as the region’s economies have been expanding
steadily.7 This is to be expected, however. When a country’s economy grows, opportunities for
internal trade increase compared to opportunities for trade with the outside world. As a result, as
countries’ economies grow, their external trade tends to grow less rapidly.
f i g u r e 6 Total international trade of the Indo-Pacific (1993–2018)

(2016 dollars, trillions, adjusted for currency fluctuations)
Total trade
Conflict and Violence

Only three interstate conflicts in the Indo-Pacific in the past quarter century have resulted
in more than 25 battle-related deaths in a single year. By far the most significant is the ongoing
India-Pakistan conflict, which has resulted in at least 1,600 deaths since 1993. A series of
intermittent border clashes between Thai and Cambodian government forces that occurred from
6 IMF, “Direction of Trade Statistics,” July 7, 2019, https://data.imf.org/?sk=9D6028D4-F14A-464C-A2F2-59B2CD424B85; and IMF, World
Economic Outlook Database, April 2019, https://www.imf.org/external/pubs/ft/weo/2019/01/weodata/index.aspx. Adjustments for currency
fluctuations were made using the Trade Weighted U.S. Dollar Index found at “FRED Economic Data,” Federal Reserve Bank of St. Louis,
July 8, 2019, https://fred.stlouisfed.org/series/DTWEXM.
7 If trade grew by a constant annual percentage, the graph would take the form of an exponential growth curve, like the graph of regional
GDP growth in Figure 3. Instead the graph is roughly linear, suggesting that, on average, year-on-year growth is gradually diminishing on a
percentage basis.
CHAPTER 2 u CLIFF
17
1995 to 2011 resulted in a total of 52 deaths. Lethal clashes between North and South Korea have
also occurred over the years. The most serious incident since 1993 occurred in March 2010 when
a South Korean naval vessel was sunk by a North Korean torpedo, resulting in the deaths of 46
South Korean sailors.8
Internal conflicts have been a much greater cause of fatalities in the region than interstate conflict
over the past quarter century. From 1993 to 2018, at least 140,000 people died as a direct result of
organized or communal violence internal to countries in the region. Most of these deaths were
associated with insurgencies and separatist movements. Several major insurgencies have ended
since 1993, however, including the Punjab insurgency in India (1993); the Khmer Rouge insurgency
in Cambodia (1999); the separatist movement in Aceh, Indonesia (2005); the Maoist insurgency in
Nepal (2006); the Tamil insurgency in Sri Lanka (2009); and the Moro Islamic Liberation Front
insurgency in the Philippines (2012). Largely as a result, although new insurgencies have arisen
in the region over the past quarter century, notably the Pattani insurgency in southern Thailand
and the Islamic State in the Philippines and Bangladesh, fatalities due to internal conflict, which
averaged more than 7,000 per year from 1993 to 2010, have averaged only 2,600 per year since
then (see Figure 7). Since 2009, moreover, fatalities due to internal conflict have occurred almost
exclusively in four countries: India, Myanmar, the Philippines, and Thailand.9
By contrast, annual deaths due to terrorism in the region do not appear to have significantly
changed over the past quarter century. From 1994 through 2017, an average of 1,360 people were
reported to have been killed each year by terrorist attacks, with no discernable trend over time (see
Figure 8). From 2010 to 2017, however, three-quarters of these fatalities were concentrated in just
three countries: India (36%), the Philippines (26%), and Thailand (12%).10
Political Change
There has been significant political change in the Indo-Pacific over the past quarter century. Of
the 25 countries in the region with populations of at least 500,000 in 1994, 9 had changed their form
of government at least once by 2019. One entirely new country (Timor-Leste) has also been created.
In 1994 there were seventeen countries in the region with populations greater than 500,000 that
were assessed as being democracies by the Center for Systemic Peace’s Polity IV Project. By 2017,
three additional countries had become democracies: Indonesia, Bhutan, and Myanmar. In addition,
a new democracy was created in 2002 when Timor-Leste became independent from Indonesia.11
8 “UCDP Georeferenced Event Dataset (GED) Global Version 19.1,” Uppsala Conflict Data Program (UCDP), Uppsala University, https://
ucdp.uu.se/downloads/#d; Ralph Sundberg and Erik Melander, “Introducing the UCDP Georeferenced Event Dataset,” Journal of Peace
Research 50, no. 4 (2013): 523–32; Stina Högbladh, “UCDP GED Codebook Version 19.1,” UCDP, Uppsala University, 2019, https://ucdp.
uu.se/downloads/ged/ged191.pdf; and Peter Foster and Malcolm Moore, “North Korea Condemned by World Powers over Torpedo Attack,”
Telegraph, May 20, 2010, https://www.telegraph.co.uk/news/worldnews/asia/northkorea/7743830/North-Korea-condemned-by-world-
powers-over-torpedo-attack.html. The UCDP defines “battle-related deaths” as “those deaths caused by the warring parties that can be
directly related to combat.” It does not include indirect deaths due to disease and starvation or criminality that result from conflict, nor
does it include attacks deliberately directed against civilians. For further information, see Therese Pettersson, “UCDP Battle-Related Deaths
Dataset Codebook v 19.1,” UCDP, Uppsala University, https://ucdp.uu.se/downloads/#d8.
9 Fatalities due to internal conflicts were calculated based on the best estimate of the number of fatalities associated with each incident in
the UCDP’s Georeferenced Event Dataset Global Version 19.1. This dataset tracks all recorded incidents of organized violence since 1989
associated with conflicts that resulted in at least 25 fatalities in a single year between 1989 and 2018. This includes conflicts in which both
sides or one side is a national government or armed nongovernmental group, as well as conflicts between differing ethnic or religious
groups. For more information, see Sundberg and Melander, “Introducing the UCDP Georeferenced Event Dataset”; and Högbladh, “UCDP
GED Codebook Version 19.1.”
10 National Consortium for the Study of Terrorism and Responses to Terrorism, Global Terrorism Database, https://www.start.umd.edu/gtd.
The Global Terrorism Database has no data for the year 1993 or after 2017.
11 “Polity IV Time-Series,” Center for Systemic Peace. Eight small Pacific Island states with populations less than 500,000—Kiribati, the Marshall
Islands, Micronesia, Nauru, Palau, Samoa, Tuvalu, and Vanuatu—were also democracies in 1994, and Tonga, formerly a monarchy, has since
become a democracy as well.

f i g u r e 7 Fatalities due to internal conflict in the Indo-Pacific (1993–2018)
f i g u r e 8 Fatalities due to terrorist attacks in the Indo-Pacific (1994–2017)
CHAPTER 2 u CLIFF
19
On the other hand, three Indo-Pacific countries that were democracies in 1994 have since
reverted to autocracy. Thailand experienced coups in 2006 and, after holding democratic elections
in 2008, again in 2014. Although elections were held in 2019, they were rigged in favor of the party of
the general who was commander of the Thai army at the time of the 2014 coup. Cambodia held free
elections in 1993 under UN supervision, but political power has been monopolized by strongman
Hun Sen since then. Bangladesh was a parliamentary democracy from 1991 to 2007, but the party
that won the 2008 elections, the Awami League, subsequently tightened its hold on power through
harassment of opposition parties and repression of critical voices in the media and civil society. In
2018 the Awami League overwhelmingly won parliamentary elections that were marred by violence
and rigged in its favor. As a result, Bangladesh can no longer be considered to be a democracy.12
Three countries that were democracies in 1994 experienced periods of autocracy or internal
chaos—Nepal, Fiji, and the Solomon Islands—but are again considered democracies today. Nepal
was a parliamentary democracy from 1991, but in 2002, as conflict with a Maoist insurgency
worsened, its king dissolved the parliament, dismissed the prime minister, and assumed executive
powers for himself. In 2006, however, in response to widespread demonstrations and a general
strike, the king relinquished his executive powers and allowed for the parliament to be restored.13
The majority of countries in the region have not experienced fundamental political change
over the past quarter century. India, Japan, the Philippines, South Korea, Malaysia, Australia,
Taiwan, Sri Lanka, Papua New Guinea, New Zealand, and Mongolia have remained democracies
throughout this period.14 At the other end of the spectrum, China, Vietnam, North Korea, Laos,
and Singapore have remained one-party autocracies.15
Table 1 groups the countries of the Indo-Pacific region with populations greater than 500,000
into five categories of political change over the past 25 years: (1) stable democracies (countries
that have remained democracies throughout the period), (2) unstable democracies (countries
that have fluctuated between democracy and authoritarian forms of government over the past 25
years), (3) new democracies (countries that have become democracies during this time), (4) new
autocracies (countries that have gone from democratic to authoritarian over the time period), and
(5) stable autocracies (countries that have been under authoritarian governments for the entire
period). As the table illustrates, only a quarter of these countries have undergone fundamental
political change over the past 25 years. Most countries that were democratic in the early 1990s are
still democracies today, and most countries that were authoritarian then are still authoritarian
today. Of the 26 countries in the table, three have gone from authoritarian to democratic, one
new democratic country has appeared, and three have gone from democratic to authoritarian. The
others have remained democratic or authoritarian or have fluctuated between the two categories.
Extrapolating from these past trends, therefore, it appears that the most likely outcome over the
next quarter century will be that the form of government in most countries will remain unchanged,
12 “Thailand,” Freedom House, https://freedomhouse.org/country/thailand; “Cambodia,” Freedom House, https://freedomhouse.org/country/

cambodia; and “Bangladesh,” Freedom House, https://freedomhouse.org/country/bangladesh.
13 “Nepal,” Freedom House, https://freedomhouse.org/country/nepal.
14 The eight small Pacific Island states—Kiribati, the Marshall Islands, Micronesia, Nauru, Palau, Samoa, Tuvalu, and Vanuatu—that were
democracies in 1993 have also remained democracies.
15 The Indian Ocean island country of Maldives, with a population of less than 500,000, has also been an autocracy for most of the past quarter
century, although it has been moving in the direction of democracy in recent years. In 2008, Maldives held its first truly free presidential
election, but the winning candidate was ousted in a coup four years later. The dictator who assumed power, however, was himself defeated
in new democratic elections held in 2018. See “Maldives,” Freedom House, https://freedomhouse.org/country/maldives; and “The Other
Contagion,” Economist, March 21, 2020.

ta b l e 1 Political trends in the Indo-Pacific (1993–2017)
Stable Unstable
New democracies New autocracies Stable autocracies
democracies democracies
Australia Fiji Bhutan Bangladesh China
India Nepal Indonesia Cambodia North Korea
Japan Solomon Islands Myanmar Thailand Laos
Malaysia – Timor-Leste – Singapore
Mongolia – – – Vietnam
New Zealand – – – –
Papua New
– – – –
Guinea
Philippines – – – –
South Korea – – – –
Sri Lanka – – – –
Taiwan – – – –
but some authoritarian countries will become democratic, some democratic countries will become
authoritarian, and some countries will fluctuate between the two categories.16
Defense Spending
According to the SIPRI Military Expenditure Database, overall defense spending in the
Indo-Pacific has tripled in real terms over the past quarter century (see Figure 9).17 This represents
an annual rate of increase of only 4.6%, however, which is less than the rate at which the economies
of the region grew over this time period. Most of the increase, moreover, is due to a single country:
China. As shown in Figure 10, prior to 2001, China was merely one of the larger defense spenders
in the region. Over the period from 1993 to 2000, for example, its estimated expenditure on defense
was less than 70% of Japan’s. By 2001, however, China’s annual defense expenditure had surpassed
Japan’s. Since then, China has rapidly left the rest of the region behind, to the point that in 2018 its
defense expenditure was nearly four times that of the second-highest spender in the region (which
is now India). Indeed, in 2018, China’s defense expenditure was approximately equal to that of all
the other countries in the region combined. Overall, it grew by more than 800% between 1993 and
2018, while defense spending by the other countries in the region grew at an average annual rate of
just 2.5% over the same period.
Figure 11 shows regional defense spending in 2030 if defense expenditures are assumed to
increase from 2018 to 2030 at the same rates as what is projected for Indo-Pacific economies as a
whole. Under this scenario, in 2030, China will still be spending three times as much on defense as
16 Chapter 4 assesses which democracies are most at risk of becoming authoritarian and which autocracies are most likely to become democratic.
17 Stockholm International Peace Research Institute (SIPRI), SIPRI Military Expenditure Database, https://www.sipri.org/databases/milex.
North Korean defense spending is not included because SIPRI does not produce estimates for North Korea.
CHAPTER 2 u CLIFF
21
f i g u r e 9 Aggregate defense spending in the Indo-Pacific (1993–2018)
f i g u r e 10 Top seven defense spenders among Indo-Pacific countries (1993–2018)

f i g u r e 11 Projected defense expenditures in 2030
the next Indo-Pacific country (India), and its defense expenditure will still be greater than the next
ten countries combined.18
Environmental Changes
The principal types of pollution that affect human and environmental health are air pollution
(including emissions of greenhouse gases), water pollution, and soil contamination. As mentioned
in chapter 1, the two types of air pollution with the most significant direct impact on human
health are particulate matter (especially that measuring less than 2.5µm in diameter, referred to as
PM2.5) and ozone. Particulate matter, in turn, can be divided into two types: (1) ambient (outdoor)
particle air pollution from vehicle emissions, coal-burning power plants, industrial emissions,
household energy use, windblown dust, and other sources, and (2) household air pollution that
results from burning solid fuels such as coal, wood, charcoal, dung, and other forms of biomass to
cook food and to heat and light homes.19
As Figure 12 shows, population-weighted averages of ambient particulate matter
concentrations in South Asia and East Asia are higher than the global average (by more than 80%
18 SIPRI Military Expenditure Database; and Hawksworth, Audino and Clarry, “The Long View.” PwC did not provide a projection for
Singapore’s GDP in 2030. This was estimated using the IMF’s projection for Singapore’s GDP in 2024 and assuming that it will continue to
grow at the 2023–24 rate (2.57%) for the following six years. Taiwan’s defense expenditure in 2030 is assumed to be the same as in 2016, as
Taiwan’s annual defense expenditure has been essentially constant since 2000. IMF, World Economic Outlook Database.
19 “How Clean Is Your Air?” State of Global Air, https://www.stateofglobalair.org/air.
CHAPTER 2 u CLIFF
23
f i g u r e 12 Ambient particulate matter concentrations in the Indo-Pacific (1990–2017)
in 2017 in the case of South Asia).20 After steadily worsening between 1990 and 2011, however,
average ambient particulate matter levels in both regions have improved since 2011. Between
2011 and 2017, levels in East Asia declined by nearly 25% and are now lower than in 1990. Levels
in South Asia, though still higher than in 1990, fell by around 9% over this time period. Average
ambient particulate matter concentrations in Southeast Asia and Oceania have been significantly
lower than the global average throughout the past quarter century and have declined further in
recent years. They are currently roughly 20% lower than they were in 1990. Despite these positive
trends, ambient particulate matter is estimated to have caused 1.8 million premature deaths in
the Indo-Pacific region in 2017 alone.
As shown in Figure 13, the proportion of the population in the region that lives in households
that burn solid fuels has fallen steadily, particularly in East Asia, over the past quarter century.
In 1990, this was the leading cause of premature death from air pollution in the Indo-Pacific.
Nonetheless, the proportion of the population burning solid fuels in South Asia and Oceania
remains significantly higher than the global average. Household air pollution is estimated to have
caused another 1.1 million premature deaths in the Indo-Pacific in 2017.21
20 Health Effects Institute, “State of Global Air 2019,” 2019, https://www.stateofglobalair.org/data. This analysis draws on data from the
Institute for Health Metrics and Evaluation, which separates Australia and New Zealand from the rest of Oceania.
21 Ibid.

f i g u r e 13 Percentage of population living in households using solid fuels (1990–2017)
As shown in Figure 14, average ozone levels in East and South Asia are higher than the global
average. They are highest in East Asia and have not improved since 1990 (though the global average
also has not improved). Ozone levels in Southeast Asia and Oceania are significantly better than
the global average but have actually worsened during this period. Ambient ozone is estimated to
have caused 370,000 premature deaths in the Indo-Pacific region in 2017.22
Collectively, these types of air pollution are estimated to have cost the inhabitants of the region
about 85 million years of their lives due to early death or disability in 2017. This represented a
significant improvement from 1990, however. In that year, air pollution is estimated to have cost
the inhabitants of the region about 120 million years of their lives, even though the population
of the region was 26% smaller than in 2017 (see Figure 15). This positive trend is primarily due
to the reduction in the prevalence of the use of solid fuels in homes, which caused an estimated
83 million life years to be lost in 1990 but only 32 million in 2017. Life years lost due to outdoor air
pollution actually increased over this time span, from 36 million in 1990 to 52 million in 2017.23
The Indo-Pacific is also both a significant contributor to global climate change and one of
the regions likely to be significantly affected by it. As noted in chapter 1, regional countries are
22 Health Effects Institute, “State of Global Air 2019.”

23 Ibid.
CHAPTER 2 u CLIFF
25
f i g u r e 14 Ambient ozone levels in the Indo-Pacific (1990–2017)
expected to contribute approximately 30% to the global rise in temperature by the year 2100.
Emissions of carbon dioxide (CO2), which is the primary cause of global climate change, over the
past 25 years are shown in Figure 16. As can be seen, CO2 emissions from the region nearly tripled
between 1992 and 2017, although this trend appears to have slowed since 2011. Total CO2 emissions
grew by only 8% between 2011 and 2017—largely because the growth in China’s emissions, which
constitute nearly 60% of all emissions by the region, slowed significantly during this period.24
Estimates of the effects of climate change on specific regions of the world are less certain than
estimates of its global effects. However, even if the average global surface temperature rises by only
1.5–2.0 degrees Celsius over preindustrial levels (which was the goal of the 2016 Paris Agreement
and is widely considered to be an optimistic outcome), tropical regions are expected to see an
increase in the frequency of periods of unusually hot weather. In addition, the frequency, intensity,
and/or number of periods of heavy precipitation are expected to increase in South and Southeast
Asia, putting those regions at greater risk of flooding.25
24 “Global Carbon Atlas,” Global Carbon Project, http://www.globalcarbonatlas.org/en/CO2-emissions.

25 Intergovernmental Panel on Climate Change, “Global Warming of 1.5oC,” 189–204, http://www.ipcc.ch/report/sr15.

f i g u r e 15 Life years lost due to air pollution in the Indo-Pacific (1990–2017)
f i g u r e 16 CO2 emissions of the Indo-Pacific (1992–2017)
CHAPTER 2 u CLIFF
27
Most estimates of the effects of anthropogenic climate change on sea levels conclude that the
average sea level will increase by one to three feet by 2100.26 A 2007 World Bank study of the
impact of different degrees of sea-level rise on 84 developing countries found that a one-meter rise
would inundate land occupied by approximately 2% of the population in East Asia and 0.5% of the
population in South Asia. Although this overall impact seems moderate, it could be significantly
more severe for individual countries. In particular, land occupied by approximately 11% of
Vietnam’s population would be inundated.27
No systematic data on soil contamination in the region was found. There are also currently
no standardized measures of water quality by which cross-country comparisons can be made or
trends over time can be assessed.28 Consequently, no overall assessments about water pollution
trends in Asia can be made. With specific regard to oceanic plastic waste, the Indo-Pacific
accounts for two-thirds of all plastic waste entering the oceans. A 2015 study published in Science
projected that, assuming there are no improvements in waste collection, economic development
and population growth will cause this figure to more than double by 2025.29
Strategic Implications
The trends analyzed above have a number of implications regarding the strategic environment
in the Indo-Pacific in coming years. First, population growth is not likely to be a major source
of stress on resources or governance. Population growth in the region is slowing, particularly
in East Asia, which is currently the most populous part of the region. Between 2020 and 2030,
the population of East Asia is projected to grow by just 1%. The populations of South Asia and
Southeast Asia are projected to grow more rapidly, but even they will increase by only around 9%
by 2030.
Second, China will remain the dominant economy of the region. Although China’s rate of
growth is slowing, prior to the coronavirus crisis its economy was still projected to increase by
more than 50% in real terms between 2018 and 2030. India’s economy was projected to grow more
rapidly than that of China but to still only be about half the size of China’s in 2030. Meanwhile
Japan’s economy is expected to stagnate as a result of the country’s shrinking population and to be
less than a sixth of the size of China’s in 2030, although it is projected to still be the third-largest
in the region. Indonesia’s economy, the fourth-largest in the region, is projected to grow steadily
but still be smaller than Japan’s in 2030. International trade by the countries in the region will also
continue to grow, although at a slower overall rate than their economies.
A third implication of these trends is that interstate war will be rare, but not unheard of in
the Indo-Pacific region. The India-Pakistan conflict continues, and other, albeit minor, interstate
conflicts have occurred over the past quarter century. The Indo-Pacific will continue to suffer from
26 See, for example, Intergovernmental Panel on Climate Change, “Global Warming of 1.5oC,” 206–7.
27 See Susmita Dasgupta et al., “The Impact of Sea Level Rise on Developing Countries: A Comparative Analysis,” World Bank, Policy Research
Working Paper, February 2007, http://documents.worldbank.org/curated/en/156401468136816684/pdf/wps4136.pdf. This study did not
assess the impact of sea-level rises on small island nations. Somewhat surprisingly, in Bangladesh, a country often cited as among the most
vulnerable to rising sea levels, less than 1% of the population would be directly affected by a one-meter increase.
28 Some candidate measures have been proposed, however. For context, see UN Environment Programme, Global Drinking Water Quality Index
Development and Sensitivity Analysis Report (Burlington, Ontario: UN Environment Programme Global Environment Monitoring System/Water
Programme, 2007), http://www.un.org/waterforlifedecade/pdf/global_drinking_water_quality_index.pdf; and Tanja Srebotnjak et al., “A Global
Water Quality Index and Hot-Deck Imputation of Missing Data,” Ecological Indicators 17 (2012): 108–19.
29 Jambeck et al., “Plastic Waste Inputs from Land into the Ocean,” Science 347, no. 623 (2015): 768–71.

internal conflicts, moreover. From 2011 to 2018, an average of 2,600 people in the region died
each year as a direct result of organized or communal violence, primarily in four countries: India,
Myanmar, the Philippines, and Thailand. The prevalence of terrorism is also unlikely to diminish
in the near term, with an average of more than 1,000 people still killed each year by terrorist
attacks, with most fatalities occurring in five countries: India, the Philippines, Thailand, China,
and Myanmar.
Based on the pattern of the past quarter century, it seems likely that regime changes will
continue to occur in the region in coming years, with some authoritarian countries becoming
democratic, some democratic countries becoming authoritarian, and some fluctuating between
the two. The majority of authoritarian countries will likely remain authoritarian, however, and the
majority of democracies will remain democracies..
Another implication is that China will remain the dominant military power of the region aside
from the United States. If defense expenditures for Indo-Pacific countries increase at the same
rates that are projected for their economies as a whole, in 2030 China will be spending three times
as much on defense as the country with the next highest defense spending (India) and more than
the next ten countries combined.
Finally, the Indo-Pacific will remain both a major source and a major victim of environmental
pollution. Outdoor air pollution levels, which affect people not just in the Indo-Pacific but
throughout the world, will improve but likely remain significantly worse than the global average.
The Indo-Pacific will also be both a major contributor to global climate change and one of the
regions likely to be significantly affected by it. Climate change is expected to cause more frequent
periods of unusually hot weather in tropical areas, and South and Southeast Asia are expected
to see an increase in the frequency, intensity, and number of periods of heavy precipitation and
floods. Many countries will also be affected by rising sea levels resulting from global warming.
Also, without dramatic improvements in waste collection, the Indo-Pacific will remain the
primary and growing source of oceanic plastic waste.
CHAPTER 2 u CLIFF
29
chapter 3
The Strategies of Key Regional Actors
31
A
n effective U.S. strategy toward the Indo-Pacific region must take account of the likely
actions of the other important actors in the region. This chapter, therefore, provides
descriptions of the primary goals that the leaders of key countries in the region are trying
to accomplish and the main elements of their strategies for pursuing those goals. These
descriptions are not intended to be exhaustive analyses of the grand strategies of each country but
rather to be summaries of the most salient features, as manifested in their external behavior in
recent years. It is of course difficult to predict a country’s future behavior, especially since most
of these countries will experience changes in leadership over the next decade. Nonetheless, any
U.S. strategy toward the region must be based on an estimate of what the other key actors are
themselves seeking to accomplish and the actions that they might take in pursuit of those goals that
would significantly affect U.S. interests.
The countries examined in this chapter are those whose strategic choices appear to have the
greatest potential to have a major impact on U.S. interests in the region. This includes the two
giants, China and India, which have the largest populations, economies, militaries, and defense
budgets. It also includes Japan and Indonesia. Japan is projected to have the third-largest economy
and third-largest defense budget in the region through 2030, and thus will continue to be a major
economic and military power. Indonesia will continue to be the third most populous country in
the region, and its economy is projected to be nearly as large as Japan’s by 2030. Thus, Indonesia
has the potential to become a major regional power.
Two other countries, North Korea and Taiwan, are discussed in this chapter, not because they
are major powers but because their actions have the potential to profoundly affect U.S. interests.
In the case of North Korea, this could come in the form of a large-scale conflict that involves the
United States. But it could also take the form of a decision by the Kim regime to give up its nuclear
weapons or a peaceful resolution of the inter-Korean conflict, including an agreement on Korean
unification. Any of these scenarios would fundamentally alter the strategic landscape in Northeast
Asia. Similarly, Taiwan has the potential to take actions that could, on the one hand, provoke
a large-scale conflict or, on the other hand, result in a permanent and peaceful resolution of its
status. Either outcome would have a major impact on U.S. interests.
The focus on these six countries does not imply that all the other regional states are
inconsequential. South Korea, for example, is projected to have the fifth-largest economy and
fourth-largest defense budget through 2030. South Korea is also a major U.S. treaty ally that hosts
significant U.S. forces while at the same time being highly dependent on trade with China. South
Korea, moreover, is currently led by a president who appears to be eager to reach a peace agreement
with North Korea, despite U.S. concerns about the Kim regime’s nuclear weapons program. Thus,
it appears possible that South Korea could change its national strategy in ways that would have
a major impact on U.S. interests. Nonetheless, President Moon Jae-in has declared that South
Korea will cooperate with the current U.S. administration’s Indo-Pacific strategy, even though that
strategy is widely seen as aimed at containing China; Seoul has not moved forward on a peace
agreement with the North because of the lack of progress in negotiations between Washington
and Pyongyang.1 Thus, it appears that a fundamental shift in South Korea’s national strategy
1 Ramon Pacheco Pardo, “South Korea’s Strategy Is Engagement,” Diplomat, April 28, 2018, https://thediplomat.com/2018/04/south-
koreas-strategy-is-engagement; Richard C. Bush, “Working at Cross Purposes? New Challenge to the Alliance in Negotiating with North
Korea” (paper presented at the KRINS-Brookings Joint Conference, Seoul, January 16, 2019), https://www.brookings.edu/wp-content/
uploads/2019/01/KRINS-Paper-2019-Working-at-Cross-Purposes-Richard-C.-Bush.pdf; and Lee Jeong-ho, “South Korea’s U.S.-China
Dilemma Deepens with Support for America’s Indo-Pacific Strategy,” South China Morning Post, July 7, 2019, https://www.scmp.com/news/
china/diplomacy/article/3017509/south-koreas-us-china-dilemma-deepens-support-americas-indo.
CHAPTER 3 u CLIFF
33
would likely occur only in response to fundamental changes in North Korea, such as a decision by
Pyongyang to give up its nuclear weapons or a collapse of the North Korean state.
Similarly, Australia is another important U.S. ally and is projected to have the seventh-largest
economy and fifth-largest defense budget through 2030. Compared to countries like China,
India, Japan, and Indonesia, however, its power potential is circumscribed by a relatively small
population (which is less than Malaysia’s population). In addition, Australia appears to be unlikely
to dramatically alter its strategy of maintaining a close alliance relationship with the United States,
even as it attempts to maintain good relations with China as well.2
Other countries in the region, such as Thailand, the Philippines, and Singapore, could
potentially take actions that would affect U.S. interests. In February 2020, for example, the
Philippines threatened to terminate its visiting forces agreement with the United States, which
provides a legal basis for U.S. troops to be temporarily deployed to the Philippines for military
exercises and humanitarian assistance operations.3 Some observers, moreover, believe that this
may be a step toward an ultimate severing of the Philippines’ alliance relationship with the United
States.4 This chapter, however, focuses on those countries most likely to take actions that would
have the greatest impact on U.S. interests.
China
The overall national goals of China’s leadership appear to have remained stable over the past
four decades. The most fundamental of these has been maintaining the control of the Chinese
Communist Party (CCP). The CCP’s response to the popular protests of 1989 clearly demonstrated
that it is willing to use whatever means it sees as necessary to maintain this hold on power. Over
the long term, however, the CCP’s primary means for maintaining its hold on power has been
to bolster its legitimacy by ensuring that the material quality of life of the Chinese people is
continuously improving. Since the late 1970s the principal policy for accomplishing this has been
the reform and opening program of economic development, although in recent years increasing
attention has been given to other quality-of-life issues, such as environmental protection.5
China’s economic development has also supported the CCP’s efforts to secure a second
important source of legitimacy: restoring the country to what Chinese elites believe to be its
rightful place as one of the most advanced and powerful nations in the world. Achieving this
goal requires that China not only be economically wealthy but also have military capabilities
commensurate with its economic might and be among the most scientifically and technologically
advanced countries in the world. It also implies recovering territories, such as Taiwan and islands
2 For Australia’s current official national strategy, see Australian Government, 2017 Foreign Policy White Paper (Canberra, November 2017),
https://www.fpwhitepaper.gov.au. For one Australian organization’s recommendations regarding future strategy, see Ashley Townshend,
Brendan Thomas-Noone, and Matilda Steward, “Averting Crisis: American Strategy, Military Spending and Collective Defence in the
Indo-Pacific,” University of Sydney, United States Studies Centre, August 2019, https://www.ussc.edu.au/analysis/averting-crisis-american-
strategy-military-spending-and-collective-defence-in-the-indo-pacific.
3 Darryl John Esguerra, “Philippines Officially Terminates VFA with U.S.,” Inquirer.net, February 11, 2020, https://globalnation.inquirer.
net/185186/fwd-breaking-philippines-officially-terminates-vfa-with-us. Specifically, the agreement allows the U.S. government to retain
jurisdiction over U.S. military personnel accused of committing crimes in the Philippines.
4 JoshuaKurlantzick, “Is Duterte Trying to End the U.S.-Philippines Alliance?” World Politics Review, February 21, 2020, https://www.
worldpoliticsreview.com/articles/28549/us-philippines-relations-take-a-hit-as-duterte-axes-a-key-military-pact.
5 See,for example, Zhong Feiteng, “China’s Grand Strategy in a New Era,” East Asia Forum, March 5, 2018, https://www.eastasiaforum.
org/2018/03/05/chinas-grand-strategy-in-a-new-era.

in the South and East China Seas, that are viewed as being rightfully part of China but that were
lost during China’s period of weakness in the nineteenth and early twentieth centuries.6
Although these goals have not changed over the past 40 years, the strategy for accomplishing
them has evolved with the changes in China’s leadership, capabilities, and international
environment. In particular, most observers agree that the foreign policy that Xi Jinping has
pursued since taking over as China’s top leader in 2012–13 has been distinct from that of his
predecessors.7 Having arranged in 2018 for the abolishment of the previous ten-year term limit
for president, moreover, it appears likely that Xi will continue to lead the country long after he
normally would have been expected to step down in 2022–23.8 Thus, China’s national strategy may
well remain largely consistent over the next decade.
Based on China’s external behavior since 2012, the current national strategy appears to contain
the following main elements: relative economic openness, the transformation of the country into
a global technological leader, the Belt and Road Initiative (BRI), military modernization, efforts to
recover lost territories, the maintenance of stability on the Korean Peninsula, increased influence
over the policies of other countries, and efforts to reshape international norms and institutions.
Continuing Relative Economic Openness

The Chinese government asserts that the further opening up of China’s economy remains
central to achieving its economic growth objectives.9 There has been relatively little movement
toward increased economic openness under Xi Jinping, however. Numerous sectors of China’s
economy remain closed to foreign investment, and state-owned enterprises continue to enjoy
preferential access to capital compared to private domestic companies. This is presumably due to
a combination of concerns about national security (e.g., from allowing foreign firms to operate
telecommunications networks), efforts to nurture China’s domestic technology (see the next
section), a belief that government guidance is needed to ensure China’s continued economic
development, and the inevitable results of the government controlling most of China’s banks and
many of its commercial enterprises.10
Transforming China into a Global Technology Leader

The leadership argues that China’s future prosperity and security depend on it becoming a
global technology leader. Chinese leaders appear to believe that China will only move into higher
value-added areas of production and avoid the “middle-income trap”—whereby economic growth
6 See, for instance, John W. Garver, Foreign Relations of the People’s Republic of China (Englewood Cliffs: Prentice Hall, 1993), 2–28.
7 For more information on these shifts in Chinese foreign policy, see Michael D. Swaine, “Chinese Views of Foreign Policy in the 19th Party
Congress,” Hoover Institution, China Leadership Monitor, January 23, 2018, https://www.hoover.org/research/chinese-views-foreign-policy-
19th-party-congress; Kevin Rudd, “Xi Jinping, China and the Global Order: The Significance of China’s 2018 Central Foreign Policy Work
Conference “ (address to the Lee Kuan Yew School of Public Policy, Singapore, June 26, 2018), https://asiasociety.org/policy-institute/kevin-
rudd-xi-jinping-china-and-global-order; and Flynt Leverett and Wu Bingbing, “The New Silk Road and China’s Evolving Grand Strategy,”
China Journal, no. 77 (2017): 110–32.
8 James Doubek, “China Removes Presidential Term Limits, Enabling Xi Jinping to Rule Indefinitely,” NPR, March 11, 2018, https://www.
npr.org/sections/thetwo-way/2018/03/11/592694991/china-removes-presidential-term-limits-enabling-xi-jinping-to-rule-indefinitely.
China’s presidency is largely a symbolic position. Xi’s power within China is reflected primarily by his status as secretary-general of the CCP
and chairman of the Central Military Commission. Neither position has ever been subject to formal term limits, but Xi’s two predecessors
both stepped down as secretary-general of the CCP after completing their second full term. Abolition of the term limit on the presidency,
therefore, is a strong indicator that Xi intends to continue to wield power after 2023.
9 Noah Barkin and Elizabeth Piper, “In Davos, Xi Makes Case for Chinese Leadership Role,” Reuters, January 17, 2017, https://www.reuters.
com/article/us-davos-meeting-china/in-davos-xi-makes-case-for-chinese-leadership-role-idUSKBN15118V; Dingding Chen, “China Has a
New Grand Strategy and the West Should Be Ready,” Diplomat, October 31, 2017; and Swaine, “Chinese Views of Foreign Policy.”
10 For more information, see Elizabeth Economy, “The Problem with Xi’s China Model,” Foreign Affairs, March 6, 2019, https://www.
foreignaffairs.com/articles/china/2019-03-06/problem-xis-china-model.
CHAPTER 3 u CLIFF
35
is said to dramatically slow when per capita income reaches approximately $10,000 in purchasing
power parity—by upgrading its technological capabilities.11 They also appear to be concerned
about dependence on technology that is controlled by foreigners, a concern supported by the U.S.
government’s recent actions to prevent U.S. companies from providing components to Chinese
telecommunications companies. Accordingly, in 2016 the Chinese government announced
an “innovation-driven development strategy” that seeks to put China “in the front ranks of
innovative nations” by 2030 and make China “a world power in scientific and technological
innovation” by 2050.12
One prominent element of this strategy is the Made in China 2025 program, which aims to make
China a world leader in ten major manufacturing sectors by 2025.13 The Chinese government’s
long-term goal appears to be to make the country self-sufficient in the production of virtually
all advanced products, from airliners to integrated circuits.14 The means employed to accomplish
this goal include investment in domestic R&D, technology transfers as a condition for foreign
companies to access China’s market, and espionage. Part of the strategy, however, also appears to
be to progressively restrict foreign access to the Chinese market in these areas.15 Thus, although
China will continue to remain relatively open to external trade and investment, these policies will
likely gradually diminish the degree of openness of the Chinese economy, even though they are
intended to improve the country’s long-term growth prospects.
Promoting the Belt and Road Initiative

First announced in 2013 as the One Belt, One Road initiative, BRI is an effort to strengthen
China’s economic linkages with the rest of Asia, Europe, Africa, and Oceania. Although most
attention has been given to infrastructure projects in areas such as transportation, energy, and
telecommunications, the initiative also entails free trade agreements (FTAs), currency-swap
agreements, policy coordination, and people-to-people exchanges with the participating countries,
which now include more than half of the nations of the world. Banks controlled by the Chinese
government have pledged nearly $1 trillion in loans for BRI projects.16
The initiative seeks to fulfill several aims. One is to support China’s continued economic
development. China’s growth in recent decades has been driven in part by a growth in exports
11 On the middle-income trap, see Barry Eichengreen, Donghyun Park, and Kwanho Shin, “Growth Slowdowns Redux: New Evidence on
the Middle-Income Trap,” National Bureau of Economic Research, Working Paper, January 2013, http://www.nber.org/papers/w18673.
Many economists, however, question whether the middle-income trap actually exists. For further discussion, see Greg Larson, Norman
Loayza, and Michael Woolcock, “The Middle-Income Trap: Myth or Reality?” World Bank, Research and Policy Briefs, March 2016, http://
documents.worldbank.org/curated/en/965511468194956837/pdf/104230-BRI-Policy-1.pdf.
12 State Council Information Office of the People’s Republic of China (PRC), “China Unveils Strategy for Innovation-Driven Development,”
May 20, 2016, https://www.scio.gov.cn/32618/Document/1478253/1478253.htm; and State Council Information Office (PRC), “Guojia
chuangxin qudong fazhan zhanlüe gangyao zhengce jiedu” [Policy Interpretation of National Innovation-Driven Development Strategy
Guidelines], May 24, 2016, https://www.scio.gov.cn/34473/34515/Document/1478593/1478593.htm.
13 State Council Information Office (PRC), “Guowuyuan guanyu yinfa ‘Zhongguo zhizao 2025’ de tongzhi” [State Council Notification
Regarding the Publication of “Made in China 2025”], May 8, 2015, http://www.gov.cn/zhengce/content/2015-05/19/content_9784.htm;
U.S. Chamber of Commerce, “Made in China 2025: Global Ambitions Built on Local Protections,” 2017, https://www.uschamber.com/
sites/default/files/final_made_in_china_2025_report_full.pdf; and Jung Jihyun, “China’s Innovation-Driven Development Strategy and
Prospects,” Korea Institute for Economic Policy, December 15, 2016, http://www.kiep.go.kr/eng/sub/view.do?bbsId=kiepOpi&nttId=191936.
This dependence was dramatically illustrated in 2018, when a temporary U.S. ban on supplying U.S.-made components to the Chinese
telecommunications giant ZTE nearly caused the company’s bankruptcy. For context, see Cary Huang, “U.S. Tech Ban on ZTE Has Exposed
China’s Achilles’ Heel,” South China Morning Post, April 29, 2018, https://www.scmp.com/week-asia/opinion/article/2143534/us-tech-ban-
zte-has-exposed-chinas-achilles-heel.
14 Jackie Northam, “U.S. Aims to Stall China’s Efforts to Be the Global Leader in the Race for 5G,” NPR, December 19, 2018, https://www.npr.
org/2018/12/19/678089584/u-s-aims-to-stall-chinas-efforts-to-be-the-global-leader-in-the-race-for-5g.
15 U.S. Chamber of Commerce, “Made in China 2025,” 6–8.
16 Nadège Rolland, “A Concise Guide to the Belt and Road Initiative,” National Bureau of Asian Research (NBR), April 11, 2019, https://www.
nbr.org/publication/a-guide-to-the-belt-and-road-initiative.

and investment in infrastructure. The contributions of these two sources of growth, however, have
diminished in recent years. The value of China’s exports in 2018 was only 5% greater than in 2013
in real terms, and China’s need for domestic infrastructure is regarded as largely satiated for now.
BRI is intended to boost China’s exports by contributing to the economic growth of countries in
Asia and Africa, providing new sources of revenue for China’s construction companies and the
industries that support them, and facilitating trade with Asia, Africa, and Europe.17
A second goal of BRI is to increase China’s economic security by diversifying the routes by
which the country receives energy supplies. China is heavily dependent on imports of oil and
gas that pass through the Strait of Malacca, which Chinese leaders have long seen as a point
of vulnerability. BRI will expand the infrastructure linking China to Russia and Central Asia,
enabling it to import more oil and gas via overland routes from the Caspian Basin. Similarly,
improvements to the infrastructures of Pakistan and Myanmar will enable China to receive energy
supplies from the Persian Gulf without their having to pass through the Strait of Malacca.18
A third and related goal is to accelerate the development of western China. China’s economic
growth over the past four decades has disproportionately benefited its eastern coastal areas. In
recent years, therefore, the government has adopted measures intended to stimulate economic
growth in inland regions, particularly the western parts of the country. This is accorded particular
importance because Chinese leaders see economic development as key to reducing unrest among
minority ethnicities, which tend to be concentrated in these areas. BRI is expected to contribute to
this effort by improving the internal infrastructure of China’s western regions and providing them
with better access to markets and resources in countries to the west and south.19
A fourth goal of BRI is to increase China’s political and diplomatic influence in participating
countries. Large-scale investment is expected to give China the ability to favorably affect the
policies of these countries, both regarding their openness to trade and investment with China and
on other issues (such as China’s treatment of its Muslim minorities).20
Continuing Military Modernization

When China launched its reform and opening economic development program in the late
1970s, the military was initially neglected in order to reduce the burden of defense spending
on government finances. Since the mid-1990s, however, the Chinese leadership has supported a
sustained effort to modernize China’s armed forces. This has been reflected in a large increase in
the amount of resources devoted to the military. Official defense expenditures grew by nearly 400%
in real terms between 1996 and 2009, an average annual rate of increase of 13%. Although the
growth in China’s defense spending has slowed since 2009, defense expenditures have continued
to increase at more than 5% a year in real terms, and China’s annual defense expenditures now
17 International Monetary Fund (IMF), World Economic Outlook Database, October 2019, https://www.imf.org/external/pubs/ft/weo/2019/02/
weodata/index.aspx; and Nadège Rolland, China’s Eurasian Century? Political and Strategic Implications of the Belt and Road Initiative (Seattle:
NBR, 2017), 98.
18 Ian Storey, “China’s ‘Malacca Dilemma,’” Jamestown Foundation, China Brief, April 12, 2006, https://jamestown.org/program/chinas-
malacca-dilemma; Rolland, China’s Eurasian Century? 111–13; and Leverett and Wu, “The New Silk Road and China’s Evolving Grand
Strategy,” 127.
19 Leverett and Wu, “The New Silk Road and China’s Evolving Grand Strategy,” 126–27; Rolland, “A Concise Guide to the Belt and Road
Initiative”; and Rolland, China’s Eurasian Century? 110–11.
20 Rolland, “A Concise Guide to the Belt and Road Initiative”; Leverett and Wu, “The New Silk Road and China’s Evolving Grand Strategy,”
127–30; and Rolland, China’s Eurasian Century? 114–16. On the response of Muslim countries to China’s treatment of its Muslim minorities,
see Anna Fifield and Kareem Fahim, “China Wages Relentless Crackdowns on Its Muslims. But Saudi Arabia Stays Quiet as It Bolsters Ties
with Beijing,” Washington Post, May 27, 2019.
CHAPTER 3 u CLIFF
37
far exceed those of any other country except the United States.21 These increases in defense
expenditures have enabled improvements in the equipment, training, and personnel of China’s
armed forces and been accompanied by efforts to modernize the doctrine and organization of the
armed forces as well.22 The drive to increase China’s military capabilities, moreover, appears likely
to continue for the foreseeable future. At the 19th Party Congress in 2017, for example, Xi Jinping
declared that the CCP leadership’s goals were to ensure that by 2035 the modernization of the
armed forces would be “basically completed” and that by the middle of the century China would
be a “world-class” military power.23
Recovering Lost Territories

As noted above, recovering territories that are viewed as parts of China that were lost during
its period of weakness in the nineteenth and early twentieth centuries is an important element
of the CCP’s drive to restore China to its “rightful” place in the world. With a population of
24 million and occupying a strategic position off of China’s coast, Taiwan is by far the most
important territory in this regard. Consequently, Beijing will continue its efforts to persuade
Taiwan to reunify with the mainland, using a combination of diplomatic and economic pressure
and inducements, coupled with a threat to use force if Taiwan formally declares independence
or refuses for an extended period of time to agree to unification.24 Consistent with this stance,
Beijing has increased its diplomatic and economic pressure since the election in 2016 of a
president and legislative majority from Taiwan’s pro-independence parties.25 This has included
inducing 7 of the just 22 countries that still maintained official diplomatic relations with Taiwan
in 2016 to sever ties with the island, preventing Taiwan from participating as an observer in
meetings of international organizations such as the World Health Assembly and International
Civil Aviation Organization, increasing the frequency and scale of military exercises and patrols
around the island, limiting the number of Chinese tourists traveling to Taiwan, and cutting off
direct communications with Taiwan’s government.26 Tsai Ing-wen was re-elected as president and
her party retained control of Taiwan’s legislature in January 2020, suggesting that this pressure
21 National Bureau of Statistics of China, China Statistical Yearbook 2007 (Beijing, 2007), http://www.stats.gov.cn/tjsj/ndsj/2007/indexeh.
htm; National Bureau of Statistics of China, China Statistical Yearbook 2010 (Beijing, 2010), http://www.stats.gov.cn/tjsj/ndsj/2010/
indexeh.htm; National Bureau of Statistics of China, China Statistical Yearbook 2018 (Beijing, 2018), http://www.stats.gov.cn/tjsj/
ndsj/2018/indexeh.htm; and Stockholm International Peace Research Institute (SIPRI), SIPRI Military Expenditure Database. China’s
actual defense expenditures are believed to exceed the officially acknowledged amount, but the rate of growth of actual defense
expenditures is assumed to be roughly the same as the rate of growth of official expenditures.
22 On developments in the Chinese military, see Roger Cliff, China’s Military Power: Assessing Current and Future Capabilities (New York:
Cambridge University Press, 2015); and State Council Information Office (PRC), China’s National Defense in the New Era (Beijing, July
2019), available at http://www.xinhuanet.com/english/2019-07/24/c_138253389.htm.
23 Xi Jinping, “Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great Success of
Socialism with Chinese Characteristics for a New Era” (speech delivered at the 19th National Congress of the Communist Party of China,
Beijing, October 18, 2017), available at http://www.xinhuanet.com/english/download/Xi_Jinping’s_report_at_19th_CPC_National_
Congress.pdf.
24 Teddy Ng and Lawrence Chung, “Chinese President Xi Jinping Urges Taiwan to Follow Hong Kong Model for Unification,” South China
Morning Post, January 2, 2019, https://www.scmp.com/news/china/politics/article/2180391/chinese-president-xi-jinping-urges-taiwan-
follow-hong-kong-model; “Anti-Secession Law (Full text) (03/15/05),” China’s Embassy to the United States, http://www.china-embassy.
org/eng/zt/999999999/t187406.htm; and State Council Information Office (PRC), The One-China Principle and the Taiwan Issue (Beijing,
February 21, 2000), http://en.people.cn/features/taiwanpaper/taiwan.html.
25 The terms “pro-independence” and “pro-unification” are used here to contrast those who see Taiwan as an independent nation that should
always be politically separate from mainland China with those who see Taiwan as part of a greater Chinese nation that should eventually
be reunited. Only a small percentage of Taiwan’s population actually desires unification with the mainland under the current Chinese
government.
26 Ralph Jennings, “Kiribati Cuts Ties with Taiwan, Presaging Switch to China,” Associated Press, September 20, 2019, https://apnews.com/9
0e8938980404130a63641162d125db2; and Abraham Denmark, “China’s Increasing Pressure on Taiwan,” Wilson International Center for
Scholars, January 30, 2018, https://www.wilsoncenter.org/blog-post/chinas-increasing-pressure-taiwan.

campaign is not succeeding, but Beijing has declared that its policy toward Taiwan will remain
unchanged.27 In addition, China appears to have increased its military operations near Taiwan in
the first few months of 2020.28
In the South and East China Seas, China appears to be employing a similar approach of
seeking to take control of the territory it claims without overtly using force. In the case of the
South China Sea, this has included expanding and building military facilities on the features
that China already occupies; increasing patrols in the area by Chinese naval, coast guard, and
maritime militia vessels; fishing and exploring for oil and gas in the disputed areas, while blocking
other claimants from doing the same; and harassing foreign military vessels that are conducting
innocent passage through the territorial waters of islands in the South China Sea or exercising or
conducting surveillance operations in the South China Sea more generally, even outside the twelve-
mile territorial waters of the features claimed by China.29 The long-term goal of these activities
appears to be to secure virtually exclusive economic and military access to the areas China claims
while denying it to other countries. If successful, this approach would result in China exercising
effective control over the entire South China Sea without ever actually using force to expel the
other claimants from any of the features they currently occupy.30
In the case of the East China Sea the dispute is focused primarily on the Senkaku/Diaoyu
Islands, which are claimed by both China and Japan.31 Japan first laid claim to the islands in 1895
during the First Sino-Japanese War. The United States took control of them after World War II but
transferred ownership to Japan in 1972 when it returned Okinawa and the other Ryukyu Islands.
Beijing, however, asserts that the islands were originally Chinese territory and has verbally
protested Japan’s control over them since the 1970s. In 2012, when the Japanese government
purchased three of the islands from their private owner, China began sending coast guard vessels
into the territorial waters of the islands, effectively contesting Japan’s control over them. These
intrusions are frequent enough that they tax the ability of Japan’s coast guard and naval forces
to respond.32 In 2013, moreover, Beijing announced an air defense identification zone (ADIZ)
covering the portion of the East China Sea that includes the Senkaku Islands and declared that
27 Elaine Kurtenbach and Johnson Lai, “Taiwan’s Leader Reelected as Voters Back Tough China Stance,” Associated Press, January 11, 2020,
https://apnews.com/623049bbc54ad3601f660acaf962d8d6; and Ben Blanchard and Yimou Lee, “China Says Will Not Change Position on
Taiwan after Landslide Election,” Reuters, January 11, 2020, https://www.reuters.com/article/us-taiwan-election/china-says-will-not-change-
position-on-taiwan-after-landslide-election-idUSKBN1ZB018.
28 John Dotson, “Military Activity and Political Signaling in the Taiwan Strait in Early 2020,” Jamestown Foundation, China Brief,
April 1, 2020, https://jamestown.org/program/military-activity-and-political-signaling-in-the-taiwan-strait-in-early-2020/?mc_
cid=dac521917c&mc_eid=1d158acb0b.
29 For more information on China’s actions in the South China Sea, see Ronald O’Rourke, “China’s Actions in South and East China Seas:
Implications for U.S. Interests—Background and Issues for Congress,” Congressional Research Service, CRS Report for Congress, R42784,
August 1, 2018, https://fas.org/sgp/crs/row/R42784.pdf.
30 In March 2014, Chinese coast guard vessels prevented the Philippines from delivering supplies to a Philippine outpost at Second Thomas
Shoal. A subsequent resupply effort was successful, however, and China does not appear to have attempted to prevent subsequent deliveries.
For a description of the incident and its implications, see Michael Green et al., “Counter-Coercion Series: Second Thomas Shoal Incident,”
Center for Strategic and International Studies (CSIS), Asia Maritime Transparency Initiative, June 9, 2017, https://amti.csis.org/counter-co-
2nd-thomas-shoal.
31 China and Japan also have a dispute over the location of the boundary between their respective exclusive economic zones and continental
shelves in the East China Sea.
32 Zack Cooper, “Flashpoint East China Sea: Potential Shocks,” CSIS, Asia Maritime Transparency Initiative, April 27, 2018, https://amti.csis.
org/flashpoint-east-china-sea-potential-shocks.
CHAPTER 3 u CLIFF
39
aircraft flying in the ADIZ should report their flight plans to the Chinese government and follow
the instructions of the Ministry of Defense while in the zone.33
Beijing’s strategy in the East China Sea thus appears to be to call into question whether the
Senkaku Islands are in fact controlled by Japan while avoiding a direct confrontation over them.
Its actions could have the effect of casting doubt on whether the United States would come to
Japan’s aid in the event of a conflict between Japan and China over the islands. Although the
United States has stated that the Senkaku Islands are covered by the U.S.-Japan Security Treaty,
this statement is predicated on a recognition that Japan exerts administrative control of the islands
rather than on an acceptance of Japan’s claim to sovereignty over them.34 If it were no longer clear
that Japan actually controlled the islands, the United States might then conclude that it was no
longer obligated to come to Japan’s aid in the event of a conflict. A withdrawal of U.S. military
protection, in turn, might cause Japan to eventually relinquish its claim to the islands in the face
of an increasingly powerful Chinese military. As in the South China Sea, moreover, this change in
the status quo could be accomplished without China ever resorting to the overt use of force.
Maintaining Stability on the Korean Peninsula

The Korean Peninsula is a potential source of significant threats to China’s security and
prosperity. Beijing’s overriding goal, therefore, is to ensure stability on the peninsula. Most
fundamentally, this requires ensuring the continued existence of a functioning government
in North Korea. A breakdown of governance in North Korea, due to a succession crisis or coup
attempt, for example, could result in hundreds of thousands of North Koreans fleeing into China.
Probably even more concerning to the Chinese leadership, this scenario could also lead to the
occupation of North Korea by South Korean and U.S. forces, resulting in a Korean Peninsula
unified under the Republic of Korea (ROK) government and allied to the United States.
Instability on the Korean Peninsula could come in other forms as well. North Korean behavior
that provokes a U.S. attack on the North, for example, would also not be in China’s interests, as
it would almost certainly bring about an increased U.S. military presence in Northeast Asia. This
situation could also cause North Korean refugees to flee to China, lead to an invasion of North
Korea by South Korean and U.S. forces, or even result in China being drawn into conflict with the
United States.35
Instability could also come in the form of peaceful unification of the Korean Peninsula, which
Beijing would not like to see either, as the most plausible scenario would be a Korea unified under
the ROK government. Even if this were to result in withdrawal of U.S. forces from the peninsula
and termination of the U.S.-ROK mutual defense treaty, China would now have a powerful, unified
33 “Announcement of the Aircraft Identification Rules for the East China Sea Air Defense Identification Zone of the PRC,” Xinhua, November
23, 2013, http://www.china.org.cn/china/2013-11/23/content_30683623.htm. In practice, however, China does not appear to be enforcing its
regulations for the ADIZ. See Edmund J. Burke and Astrid Stuth Cevallos, In Line or Out of Order? China’s Approach to ADIZ in Theory and
Practice (Santa Monica: RAND Corporation, 2017), 12–13; and Cooper, “Flashpoint East China Sea.”
34 “Tensions in the East China Sea,” Council on Foreign Relations (CFR), Global Conflict Tracker, January 23, 2019, https://www.cfr.org/
interactive/global-conflict-tracker/conflict/tensions-east-china-sea.
35 Taisuke Mibae, “The United States and Its Allies Need to Understand China’s North Korea Policy,” Atlantic Council, December 17, 2018,
https://www.atlanticcouncil.org/blogs/new-atlanticist/the-united-states-and-its-allies-need-to-understand-china-s-north-korea-policy;
Leif-Eric Easley, “Why China Takes a Middle-of-the-Road Policy toward North Korea,” Washington Post, February 28, 2019, https://www.
washingtonpost.com/politics/2019/02/28/why-china-takes-middle-of-the-road-policy-toward-north-korea/?utm_term=.5358e567701e;
and Eleanor Albert, “The China–North Korea Relationship,” CFR, March 28, 2018, https://www.cfr.org/backgrounder/china-north-korea-
relationship.

democracy on its northeastern border. Thus, the Chinese leadership’s preference is for North Korea
to continue to exist as a separate entity (although not necessarily under the current regime).36
The goal of ensuring stability on the Korean Peninsula means that Beijing has, on the one hand,
refrained from imposing economic pressure on North Korea sufficient to force Pyongyang to give
up its nuclear weapons program. Chinese leaders and analysts appear to believe that the current
regime will never do so voluntarily and thus that the only possible result of severe economic
pressure on North Korea would be regime collapse. On the other hand, when North Korea’s
nuclear and missile tests in 2016 and 2017 appeared to be causing the United States to contemplate
launching a preemptive strike, China began more strictly implementing UN Security Council
sanctions against North Korea. Chinese leaders apparently calculated that the risk of regime
collapse as a result of increased economic pressure was less than the risk of a U.S. attack if North
Korea continued with its weapons development. After Kim Jong-un announced the suspension of
nuclear and missile tests and held a summit with Donald Trump in April 2018, however, China
eased its economic pressure on the country.37
China is likely to continue this approach in the future: acquiescing to international sanctions
to avoid the appearance of abetting North Korea’s nuclear weapons development and denying
the United States a pretext for launching an attack on North Korea, but refraining from exerting
so much pressure as to bring about regime collapse. In the meantime, Beijing will continue to
urge Pyongyang to implement Chinese-style economic reforms, in the belief that economic
development will increase North Korea’s chances of survival over the long term.
Increasing Influence over the Policies of Other Countries

China’s leadership perceives the nation as surrounded by potential adversaries, particularly
the United States and its allies. In addition, it is concerned that Islamic fundamentalism and
insurgent movements in Central Asia could spread into China.38 As a result, Beijing seeks to
increase its influence over countries on China’s periphery as well as key countries elsewhere in
the world. The means employed for doing so range from the traditional tools of diplomacy to
more surreptitious methods.
The most obvious means employed are overt efforts to use public diplomacy and propaganda
to shape the perceptions of the leaders and populations of other countries in ways favorable to
China. This includes efforts to present a positive image of China through diplomacy in various
forums and through sponsoring cultural activities abroad such as festivals, performances, and
exhibitions of traditional Chinese art. In addition, China makes its official media—such as China
Global Television Network, China Radio International, and the newspaper China Daily—widely
36 According to experts on China’s foreign policy who were interviewed for this project, however, China’s leadership regards the unification of
the peninsula as ultimately inevitable. When it appears that unification is imminent, therefore, China’s leadership will most likely push for
the creation of a neutral Korea and the withdrawal of U.S. forces from the peninsula.
37 Mibae, “The United States and Its Allies”; Easley, “Why China Takes a Middle-of-the-Road Policy toward North Korea”; Albert, “The China–
North Korea Relationship”; Uri Friedman, “Can America Live with a Nuclear North Korea?” Atlantic, September 14, 2017; James Schoff
and Feng Lin, “Making Sense of UN Sanctions on North Korea,” Carnegie Endowment for International Peace, https://carnegieendowment.
org/publications/interactive/north-korea-sanctions; Choe Sang-Hun, “‘We No Longer Need’ Nuclear or Missile Tests, North Korean Leader
Says,” New York Times, April 20, 2018, https://www.nytimes.com/2018/04/20/world/asia/kim-jong-un-hotline-korea.html; and Ruediger
Frank, “North Korea’s Economic Policy in 2018 and Beyond: Reforms Inevitable, Delays Possible,” 38 North, August 8, 2018 https://
www.38north.org/2018/08/rfrank080818/.
38 Rolland, China’s Eurasian Century? 110–11.
CHAPTER 3 u CLIFF
41
available abroad, in either English or the language of the recipient country, often for free or at
subsidized rates.39
The Chinese government also uses economic leverage to influence the decision-making
and even the perceptions of foreign leaders and populations on issues of importance to China.
In the past this approach primarily involved denying, or threatening to deny, access to the
Chinese market to countries or organizations that took—or were contemplating taking—actions
objectionable to the Chinese government, such as criticizing China’s human rights record or
selling arms to Taiwan. In addition, China has also long provided relatively modest amounts of
development assistance to other developing countries. As China’s economy has grown, outbound
investment by Chinese companies, often financed by loans from Chinese banks, has also become
an increasingly effective tool for promoting a positive image of China and rewarding countries
for adopting favorable policies and attitudes. For example, as noted above, increasing China’s
influence over other countries has been an important goal of BRI. Finally, the Chinese government
has increasingly taken advantage of the legal systems in democratic countries to threaten lawsuits
against publishers of unfavorable descriptions of China.40
Other means that Beijing employs for influencing the policies of other countries are less
overt. One well-known example is the Confucius Institutes and Confucius Classrooms that the
government has set up at universities and secondary schools throughout the world. These institutes
provide classes in Mandarin Chinese as well as organize Chinese cultural exhibitions and other
events. The Chinese government provides an administrator, teachers, teaching materials, and
funding, making the institutes highly attractive to schools that wish to provide Chinese-language
instruction without incurring the costs that would be associated with supporting such a program.
The teaching materials used in these institutes, however, present the Chinese government’s
preferred perspective on issues relating to China, and students are reportedly prohibited from
discussing issues such as Tibet, Taiwan, China’s maritime claims, or the banned Falun Gong
religious sect.41
The Chinese government also attempts to influence academic discourse about China in other
ways, such as by lodging protests about invited speakers or events (e.g., those addressing Taiwan’s
status or human rights in China) and, in retaliation for foreign universities hosting such speakers
or events, preventing them from cooperating with partner institutions in China. Chinese students
at foreign universities have also taken actions such as demanding the removal of research or
decorative materials (e.g., Taiwan’s flag) from a university, demanding that university faculty
alter teaching materials on sensitive topics, and protesting controversial speakers or activities on
campus related to China. Although in some cases Chinese students may be acting on their own
39 For more information, see Anne-Marie Brady, “Magic Weapons: China’s Political Influence Activities under Xi Jinping” (paper presented at
the conference “The Corrosion of Democracy Under China’s Global Influence,” Arlington, September 16–17, 2017), 5–7, 9–10, https://www.
wilsoncenter.org/sites/default/files/magicweaponsannemariebradyseptember162017.pdf; Philippe Le Corre, “China’s Rise as a Geoeconomic
Influencer: Four European Case Studies,” Carnegie Endowment for International Peace, October 2018, 3–6, https://carnegieendowment.
org/2018/10/15/china-s-rise-as-geoeconomic-influencer-four-european-case-studies-pub-77462; and Samantha Custer et al., “Ties that
Bind: Quantifying China’s Public Diplomacy and Its ‘Good Neighbor’ Effect,” AidData, June 27, 2018, 7–16, https://www.aiddata.org/
publications/ties-that-bind.
40 See, for example, Jacqueline Williams, “Australian Furor over Chinese Influence Follows Book’s Delay,” New York Times, November 20, 2017,
https://www.nytimes.com/2017/11/20/world/australia/china-australia-book-influence.html; Harry Krejsa, “Under Pressure: The Growing
Reach of Chinese Influence Campaigns in Democratic Societies,” Center for a New American Security, April 27, 2018, https://www.cnas.
org/publications/reports/under-pressure; Bilahari Kausikan, “Manipulation, Chinese Style,” Nikkei Asian Review, August 22, 2018, https://
asia.nikkei.com/Opinion/Manipulation-Chinese-style; Le Corre, “China’s Rise as a Geoeconomic Influencer”; Custer et al., “Ties That Bind,”
13–14; and Rolland, China’s Eurasian Century? 114–16.
41 Custer et al., “Ties That Bind,” 9–12; and Krejsa, “Under Pressure.”

initiative, in other cases they are specifically organized or supported by the Chinese embassy in
the country.42
Chinese students and academics studying or living abroad are themselves also targets of the
Chinese government’s efforts to control the discourse about China overseas. The Chinese Students
and Scholars Associations on campuses receive funding and instructions from the Chinese
embassy to organize activities such as lining the streets to welcome Chinese leaders arriving for
state visits or posting articles and organizing study sessions regarding the Chinese government’s
goals and policies. On the other hand, Chinese students and academics who are involved in
democracy movements or other activities seen as a threat to the CCP may be harassed or have
their families in China threatened.43
The Chinese government also attempts to use ethnic Chinese communities abroad as a vehicle
for influencing the governments of their countries. In some cases it appeals to the nationalism or
ethnic pride of those communities by sponsoring cultural activities and visits to ancestral villages
in China. In return, these communities are expected to support the Chinese government’s position
on issues such as China’s territorial claims in the South China Sea or speeches by the Dalai Lama.
The Chinese government has also taken financial control of many Chinese-language media outlets
abroad that had been independent sources of news. In many cases, outlets that resist Chinese
buyouts have seen their advertisers withdraw support under pressure from Beijing.44
Another means of influencing countries is the cultivation of key individuals in those countries.
This can take the form of providing public figures, academics, and journalists who are seen as
holding relatively benign views toward China with preferential access to Chinese officials or
inviting such individuals to participate in all-expenses-paid conferences and tours in China.45 The
cultivation of key individuals in foreign countries can also involve more direct efforts. In 2017 an
Australian senator was forced to resign when it was revealed that a Chinese property developer had
given him A$40,000 (about US$27,000) to help pay personal debts. After receiving the payment,
the senator publicly called for Australia to respect China’s territorial claims in the South China Sea,
in contradiction to his own party’s position on the issue. He also allegedly warned an executive at
the property developer that the executive’s phone was being tapped by Australian intelligence.
42 Anastasya Lloyd-Damnjanovic, “A Preliminary Study of PRC Political Influence and Interference Activities in American Higher Education,”
Woodrow Wilson International Center for Scholars, https://www.wilsoncenter.org/publication/preliminary-study-prc-political-influence-
and-interference-activities-american-higher; Alexander Bowe, “China’s Overseas United Front Work: Background and Implications for
the United States,” U.S.-China Economic and Security Review Commission, Staff Research Report, August 24, 2018, https://www.uscc.
gov/Research/china%E2%80%99s-overseas-united-front-work-background-and-implications-united-states; Vicky Xiuzhong Xu, “Chinese
Nationalism Jostles with Academic Freedom in Australia,” New York Times, November 15, 2017, https://www.nytimes.com/2017/11/15/
world/australia/china-students-censorship.html; Nick McKenzie et al., “The Chinese Communist Party’s Power and Influence in Australia,”
Australian Broadcasting Corporation (ABC), June 3, 2017, https://www.abc.net.au/news/2017-06-04/the-chinese-communist-partys-power-
and-influence-in-australia/8584270; A. Odysseus Patrick and Emanuel Stoakes, “China’s Sway Chills Campus Speech in 2 Pacific Nations,”
Washington Post, August 12, 2019; and Krejsa, “Under Pressure.”
43 Xu, “Chinese Nationalism Jostles with Academic Freedom in Australia”; McKenzie et al., “The Chinese Communist Party’s Power and
Influence in Australia”; and Bethany Allen-Ebrahimian, “China’s Long Arm Reaches into American Campuses,” Foreign Policy, March 7,
2018, https://foreignpolicy.com/2018/03/07/chinas-long-arm-reaches-into-american-campuses-chinese-students-scholars-association-
university-communist-party.
44 Kausikan, “Manipulation, Chinese Style”; Amy Qin, “Worries Grow in Singapore Over China’s Calls to Help ‘Motherland,’ ” New York
Times, August 5, 2018, https://www.nytimes.com/2018/08/05/world/asia/singapore-china.html; Eleanor Ainge Roy, “Chinese Interference
in New Zealand at ‘Critical’ Stage, Says Canada Spy Report,” Guardian, May 31, 2018, https://www.theguardian.com/world/2018/jun/01/
chinese-interference-in-new-zealand-at-critical-stage-says-canada-spy-report; McKenzie et al., “The Chinese Communist Party’s Power and
Influence in Australia”; Joseph S. Nye, “China’s Soft and Sharp Power,” Project Syndicate, January 4, 2018; and Krejsa, “Under Pressure.”
45 Brady, “Magic Weapons,” 8–9; Williams, “Australian Furor over Chinese Influence Follows Book’s Delay”; and Allen-Ebrahimian, “China’s
Long Arm Reaches into American Campuses.”
CHAPTER 3 u CLIFF
43
More broadly, Australian political parties were found to have accepted at least A$6.7 million in
donations from companies believed to have links with the Chinese government.46
In New Zealand, a member of parliament who belonged to the Foreign Affairs, Defence and
Trade Committee was discovered to have once been an instructor at Chinese military academies
(although it has not been proved that he was continuing to work for the Chinese government
while in parliament). In Singapore, a Chinese-born academic was expelled for alleged covert
efforts to influence Singapore’s foreign policy on behalf of a foreign government that was
unnamed but presumed to be China. In Malaysia, senior Chinese officials reportedly offered to
bail out a government-managed investment fund, from which the prime minister and his allies
were accused of embezzling several hundred million dollars, in return for preferential deals for
Chinese companies to develop Malaysia’s infrastructure.47 Regional experts interviewed for this
report suggested that the Chinese government has taken advantage of corruption in many other
Indo-Pacific countries, particularly in Southeast Asia, to gain influence over officials.
Experts disagree about whether Beijing is actively attempting to export its authoritarian
political system. In 2017, Xi Jinping stated that China’s political system offers a “new option for
other countries and nations who want to speed up their development while preserving their
independence,” and some experts note that Beijing finds it easier to work with authoritarian
governments than democratic ones.48 Others, however, argue that China has shown that it can
cooperate with any type of government. Regardless, there is little question that China’s efforts to
covertly influence or take advantage of corruption in immature democracies have the effect of
undermining democratic norms and institutions within those countries.
Reshaping International Norms and Institutions

Since the 1980s, China has increasingly complied with accepted norms of international behavior
and been an active participant in international institutions. There are important exceptions to this
trend, however, and in some areas Beijing has sought to reshape or replace existing international
norms and institutions with its preferred alternatives. Areas in which China has adhered to
international norms or participated actively in international institutions include economics, social
development, nonaggression, health, disaster relief, refugees, nonproliferation, counterterrorism,
and counterpiracy. Even in these areas, however, it is often seen as complying with the letter but
not the spirit of norms and institutions. For example, China has repeatedly asserted its support for
the principle of nonaggression but has nonetheless behaved in ways that are assertive and coercive
in the East and South China Seas, even if its actions have fallen short of overt aggression. Similarly,
while China has not blatantly flouted the rules of the World Trade Organization, its compliance
with those rules is regarded as uneven and inconsistent.49
46 McKenzie et al., “The Chinese Communist Party’s Power and Influence in Australia”; Krejsa, “Under Pressure”; and Jamie Smyth, “Australian
MP Quits in Chinese Influence Scandal,” Financial Times, December 11, 2017, https://www.ft.com/content/7ac14e70-ded8-11e7-a8a4-
0a1e63a52f9c.
47 Roy, “Chinese Interference in New Zealand”; and Tom Wright and Bradley Hope, “WSJ Investigation: China Offered to Bail Out Troubled
Malaysian Fund in Return for Deals,” Wall Street Journal, January 7, 2019, https://www.wsj.com/articles/how-china-flexes-its-political-
muscle-to-expand-power-overseas-11546890449.
48 Le Corre, “China’s Rise as a Geopolitical Influencer,” 3–4; and Simon Denyer, “Move Over, America. China Now Presents Itself as the
Model ‘Blazing a New Trail’ for the World,” Washington Post, October 19, 2017, https://www.washingtonpost.com/news/worldviews/
wp/2017/10/19/move-over-america-china-now-presents-itself-as-the-model-blazing-a-new-trail-for-the-world/?utm_term=.bc9c99540057.
49 Michael J. Mazarr, Timothy R. Heath, and Astrid Stuth Cevallos, China and the International Order (Santa Monica: RAND Corporation,
2018), 33–67; and “China and Global Norms,” S. Rajaratnam School of International Studies (RSIS), November 2017.

Moreover, even as it technically complies with international norms and institutions, Beijing
strives to reshape or replace some of them. One means by which this is accomplished is by placing
Chinese nationals in key positions in international organizations. Although most officials in
such organizations tend to act as international civil servants who advance the interests of their
organizations, not their countries of origin, Beijing expects Chinese nationals employed by these
organizations to advance China’s interests. In other cases, Beijing works to alter or rewrite rules and
norms. For example, contrary to the standard interpretations of the United Nations Convention
on the Law of the Sea, China asserts that military vessels should first receive authorization from
a coastal nation’s government before conducting “innocent passage” through another country’s
territorial waters, and that conducting military surveillance activities while in the exclusive
economic zone of another country should be prohibited. Another example is internet governance,
where China has promoted the concept of “cyber sovereignty,” which asserts that governments
have the right to control the content of the internet within their borders.50
In still other cases, China has created new international institutions as alternatives to existing
ones. Well-known examples include the Shanghai Cooperation Organisation (SCO), the New
Development Bank (known as the BRICS bank), and the Asian Infrastructure Investment Bank
(AIIB). The SCO consists of China, Russia, four Central Asian countries, and, since 2017, India and
Pakistan. It focuses primarily on cooperation in security matters, including confidence building,
counterterrorism, and joint military exercises. The New Development Bank and the accompanying
Contingency Reserve Arrangement were created in 2014 to finance infrastructure and sustainable
development projects in the BRICS countries (Brazil, Russia, India, China, and South Africa) and
to provide liquidity protection to member countries during balance-of-payments crises. China
pursued this option primarily because its influence at the World Bank and the International
Monetary Fund (IMF), which normally play those roles, was no longer proportionate to its
economic power. Similarly, the AIIB was established in 2015 to invest in infrastructure and
development projects because China’s leadership felt that its influence at both the World Bank and
the Asian Development Bank was not commensurate with the country’s economic weight. Other
than giving China a greater role in their governance, however, these new institutions have so far
largely followed the standards employed by existing organizations such as the World Bank, IMF,
and Asian Development Bank.51
The area in which China has attempted to reshape international norms and institutions to
the greatest extent is human rights. Although it has ratified most international human rights
conventions and participates in intergovernmental human rights organizations, the Chinese
government has sought to weaken the enforcement of those conventions and organizations. It also
helped facilitate the replacement of the UN Commission on Human Rights with the UN Human
Rights Council and the institution of the Universal Periodic Review of human rights. The United
50 Mazarr, Heath, and Cevallos, China and the International Order, 34–9; Tim Rühlig, “A ‘New’ Chinese Foreign Policy under Xi Jinping?”
Institute for Security and Development Policy, March 2018; Sebastien Colin, “China, the U.S., and the Law of the Sea,” China Perspectives,
no. 2 (2016): 57–62; and Elliott Zaagman, “Cyber Sovereignty and the PRC’s Vision for Global Internet Governance,” Jamestown
Foundation, China Brief, June 5, 2018. For an analysis of China’s efforts to reshape organs and functions of the United Nations, see Kristine
Lee and Alexander Sullivan, “People’s Republic of the United Nations: China’s Emerging Revisionism in International Organizations,”
Center for a New American Security, May 2019, https://www.cnas.org/publications/reports/peoples-republic-of-the-united-nations.
51 Eleanor Albert, “The Shanghai Cooperation Organization,” CFR, October 14, 2015, https://www.cfr.org/backgrounder/shanghai-
cooperation-organization; “The Shanghai Cooperation Organisation,” SCO, January 9, 2017, http://eng.sectsco.org/about_sco; Enda Curren,
“The AIIB: China’s World Bank,” Bloomberg, August 6, 2018, https://www.bloomberg.com/quicktake/chinas-world-bank; Raj M. Desai and
James Vreeland, “What the New Bank of BRICS Is All About,” Brookings Institution, July 17, 2014, https://www.brookings.edu/opinions/
what-the-new-bank-of-brics-is-all-about; and Rühlig, “A ‘New’ Chinese Foreign Policy under Xi Jinping?”
CHAPTER 3 u CLIFF
45
Nations now reviews the human rights situation in all members every five years rather than
producing individual reports on human rights in specific countries (such as China).52
India
Unlike China, India is a democracy, and the party in power periodically changes. Thus, India’s
external strategy is more likely to change over the next decade than is China’s. Regardless of which
party is in power at a given time, however, all Indian governments share certain fundamental goals
for the nation. One is providing security, which consists of preserving India’s territorial integrity
and ensuring public safety. Aside from ordinary crime, the primary security threats in India on a
day-to-day basis come from terrorism and internal conflict. Over the past two decades, more than
30,000 people have died from these causes in India. In addition, two external powers—Pakistan
and China—claim territory that the Indian government regards as belonging to India. Pakistan
claims most of the territory of the former princely state of Jammu and Kashmir, which has a total
population of approximately 20 million people and an area of roughly 86,000 square miles. Pakistan
occupies approximately 33,000 square miles of this territory with a population of approximately
6 million. China claims and occupies another 14,500 square miles, with an estimated population
of less than 10,000. China also claims, but does not occupy, the state of Arunachal Pradesh in
northeastern India, which has an area of 33,000 square miles and a population of approximately
1.7 million. The dispute between India and Pakistan has frequently erupted in conflict between
the security forces of the two countries, killing more than 1,600 people on both sides over the
past 25 years (not including those who have died in Pakistani-sponsored terrorist attacks within
Indian territory). The territorial dispute with China has been less deadly in recent years, but the
1962 border conflict resulted in more than 9,000 dead or wounded. Both Pakistan and China also
possess nuclear weapons, moreover, meaning that a conflict with either country has the potential
to escalate to a level that could result in enormous casualties and destruction.53
An additional security concern is the more than 27 million people of Indian origin living
outside India, in whose well-being the Indian government takes an increasingly active interest.
In 2015, for example, India imposed an unpublicized blockade of Nepal in response to what was
perceived as unfair treatment of Nepalese of Indian ancestry in the new constitution promulgated
that year.54
52 Mazarr, Heath, and Cevallos, China and the International Order, 40–41; The Costs of International Advocacy: China’s Interference in United
Nations Human Rights Mechanisms (New York: Human Rights Watch, 2017), https://www.hrw.org/report/2017/09/05/costs-international-
advocacy/chinas-interference-united-nations-human-rights; “China and Global Norms”; and Lee and Sullivan, “People’s Republic of the
United Nations,” 8–9.
53 Sunil Khilnani et al., “Nonalignment 2.0: A Foreign and Strategic Policy for India in the Twenty First Century,” Centre for Policy Research,
2012, 38, https://www.cprindia.org/research/reports/nonalignment-20-foreign-and-strategic-policy-india-twenty-first-century; Dhruva
Jaishankar, “Indian Strategy in a Non-strategic Age,” in India Now and in Transition, ed. Atul K. Thaka (New Delhi: Niyogi Books, 2017),
280–281; Alyssa Ayers, Our Time Has Come: How India Is Making Its Place in the World (New York: Oxford University Press, 2018), 126–33;
“Kashmir,” Encyclopedia Britannica, updated February 28, 2019, https://www.britannica.com/place/Kashmir-region-Indian-subcontinent;
“Population of Jammu and Kashmir 2018,” India Population 2018, http://indiapopulation2018.in/population-of-jammu-and-kashmir-2018.
html; “Population of Arunachal Pradesh 2018,” India Population 2018, http://indiapopulation2018.in/population-of-arunachal-
pradesh-2018.html; “UCDP Georeferenced Event Dataset (GED) Global version 19.1,” Department of Peace and Conflict Research, Uppsala
University; and Xiaobing Li, A History of the Modern Chinese Army (Lexington: University Press of Kentucky, 2007), 202, 351. Li notes that,
according to Chinese sources, 4,800 Indian personnel were killed and 2,400 Chinese soldiers were killed or wounded, while Indian sources
list total Indian casualties as 7,000. Thus, the conflict appears to have produced approximately 9,400 casualties, although the number of
deaths is unclear.
54 Aparna Pande, From Chanakya to Modi: The Evolution of India’s Foreign Policy (Noida: HarperCollins, 2017), 114–18; and Abhijnan Rej,
“Modi’s Victory in the Indian Elections: What This Means for Asia and Beyond,” NBR, May 2019, https://www.nbr.org/wp-content/uploads/
pdfs/publications/indiacaucus_may2019.pdf.

Aside from providing security, all Indian governments seek to improve the standard of living
for Indian citizens through economic development as well as other improvements to the quality
of life. Both the government of current prime minister Narendra Modi, who has been in power
since 2014, and those of his recent predecessors have emphasized macroeconomic growth, which
has averaged more than 7% a year since 2002, according to official figures. Modi, however, has
differed from his immediate predecessor, Manmohan Singh, in his approach to development.
Whereas Singh emphasized “inclusive growth,” meaning economic growth that improved the
standard of living of all social classes, the Modi government has focused on deregulation and
market-based reforms.55
A third important goal for Indian leaders has been increasing India’s international stature.
Many in India believe that the country, as one of the major civilizations, the second most populous
nation, and a large and growing economy, should be regarded as one of the leading powers of the
world. As a result, an important goal for Indian leaders is to seek such recognition for the nation.56
A final major imperative for all Indian leaders is ensuring India’s autonomy and independence.
Particularly because of the country’s history of colonization by Britain, this has been an
important priority for all governments since independence in 1947. In the decades immediately
after independence, this was manifested in an official policy of nonalignment. During the Cold
War, India sided neither with the Soviet bloc nor with the West. Although nonalignment is less
frequently invoked these days, the tradition lives on and constrains the types of relationships that
India is willing to enter into with other countries as well as its willingness to participate in certain
international agreements and regimes, even when doing so might be in its overall interest.57
India’s current national strategy is a product of the Modi government. Modi is from the Hindu
nationalist Bharatiya Janata Party (BJP), and India’s external behavior under Modi has been
more assertive than under Singh, who belonged to the more internationalist Indian National
Congress party. Nonetheless, the fact that the national goals described above have been shared
by all Indian leaders since the early 1990s suggests that if Modi is replaced by another leader in
the future, India’s strategy toward the world will probably not radically change. That strategy
currently appears to contain the following main elements: pursuing market-driven economic
growth but limiting India’s openness to external trade and investment, countering threats from
Pakistan, countering China’s growing power and influence, increasing India’s influence in the
Indian Ocean region, increasing its influence in international organizations, and promoting
Indian culture.
55 Jaishankar, “Indian Strategy,” 280; IMF, World Economic Outlook Database; Sadanand Dhume, “Out with a Whimper,” Foreign Policy,
January 13, 2014, https://foreignpolicy.com/2014/01/13/out-with-a-whimper-2; Ayers, Our Time Has Come, 77; and PR Sanjai, “World’s
Biggest Toilet-Building Spree Is Under Way in India,” Economic Times, July 31, 2018, https://economictimes.indiatimes.com/news/politics-
and-nation/worlds-biggest-toilet-building-spree-is-under-way-in-india/articleshow/65206911.cms. Note that India’s former chief economic
adviser has argued that, due to a change in India’s data sources and methodology for estimating GDP for the period since 2011–12, the
officially estimated economic growth rate for the years between 2011–12 and 2016–17 is inaccurate, and the actual growth rate for this
period was between 3.5% and 5.5%. See Arvind Subramanian, “India’s GDP Mis-estimation: Likelihood, Magnitudes, Mechanisms, and
Implications,” Center for International Development, Harvard University, Working Paper, June 2019, https://www.hks.harvard.edu/centers/
cid/publications/faculty-working-papers/india-gdp-overestimate.
56 Khilnani et al., “Nonalignment 2.0,” 7; Jaishankar, “Indian Strategy,” 280, 284; Ayers, Our Time Has Come, 95–96, 163, 176; Harsh
V. Pant, Indian Foreign Policy: An Overview (Manchester: Manchester University Press, 2016), 4–8; and Pande, From Chanakya to
Modi, 15.
57 Ayers, Our Time Has Come, 46–48, 59–62, 109–13, 118–21, 125, 164–66; Pande, From Chanakya to Modi, 4, 16–17, 95–100; Pant,
Indian Foreign Policy, 8; C. Raja Mohan, “India’s Changing Geopolitics and the New Humanitarianism,” in Shifting Power and Human
Rights Diplomacy: India, ed. Doutje Lettinga and Lars van Troost (Netherlands: Amnesty International, 2015), 24; and Khilnani et al.,
“Nonalignment 2.0,” 14.
CHAPTER 3 u CLIFF
47
Pursuing Market-Driven Economic Growth While Limiting India’s Openness to
External Trade and Investment
Economic growth, in addition to being an end in itself, is seen as a fundamental prerequisite
for India’s ability to pursue its other interests in the world. The economic reforms initiated under
Prime Minister P. V. Narasimha Rao in 1991 have resulted in growth that has averaged nearly 7%
a year since that time, and India now has the world’s third-largest economy (after China and the
United States) as measured in purchasing power parity. Although the pace of economic reform
appears to have slowed in recent years, a future government is unlikely to attempt to return to
the closed economy that existed prior to 1991. Conversely, however, the goal of ensuring India’s
continued autonomy and independence means that there are limits on the degree to which
Indian leaders are willing to open the economy to external trade and investment. Allowing
increased imports is seen as potentially making India dependent on foreign countries for food
and other critical commodities, while allowing multinational companies to freely invest in India
is seen as ceding control over key sectors of the economy to foreigners. As a consequence, India
has impeded progress toward greater liberalization in multilateral trade regimes in which it is
involved, such as the World Trade Organization and the proposed Regional Comprehensive
Economic Partnership (RCEP).58
Countering Threats from Pakistan

Pakistan continues to represent a military threat and source of terrorist attacks carried out
within India. Attempts by Pakistani soldiers to infiltrate Indian-held territory near the town of
Kargil resulted in a significant border conflict in 1999, and terrorist groups based in Pakistan (and
believed to be supported by the country’s security forces) frequently conduct attacks inside India.
As a result, India maintains significant military forces along the India-Pakistan border.
In the past, the Indian government’s emphasis was on engaging with Pakistan diplomatically
and economically. Under Modi, however, India has responded more forcefully to provocations
and attacks from Pakistan. After multiple cross-border terrorist attacks in September 2016, one of
which killed 19 Indian soldiers, India claimed that its ground forces crossed the Line of Control
into Pakistan-controlled Kashmir and destroyed terrorist camps. After Pakistan-based terrorists
killed 40 Indian paramilitary police in Kashmir in February 2019, India terminated Pakistan’s
most-favored-nation trade status and sent military aircraft to bomb Pakistani territory. The goal
of these more forceful responses is presumably to convince the Pakistani government to reduce
the frequency and scale of attacks on India by terrorist organizations based in Pakistan. Whether
this approach will be effective is not clear, but it is likely to continue as long as Modi remains
in power.59
58 IMF, World Economic Outlook Database; Pant, Indian Foreign Policy, 228–31; Jaishankar, “Indian Strategy,” 284; Pande, From Chanakya
to Modi, 16, 106–11; Ayers, Our Time Has Come, 29, 67–91, 96, 108–13, 176; Rej, “Modi’s Victory,” 4; “Haunted by Gandhi,” Economist,
November 9, 2019; and Shotaro Tani, “India Stays Away from RCEP Talks in Bali,” Nikkei Asian Review, February 4, 2020, https://asia.
nikkei.com/Economy/Trade/India-stays-away-from-RCEP-talks-in-Bali.
59 Pant, Indian Foreign Policy, 91–92; Ayers, Our Time Has Come, 129–33; Ellen Barry and Salman Masood, “India Claims ‘Surgical Strikes’
across Line of Control in Kashmir,” New York Times, September 29, 2016, https://www.nytimes.com/2016/09/30/world/asia/kashmir-
india-pakistan.html; Rej, “Modi’s Victory,” 3; Kirtika Suneja, “Pakistan’s Most-Favoured Nation Status Scrapped,” Economic Times,
February 16, 2019, https://economictimes.indiatimes.com/news/politics-and-nation/pakistans-most-favoured-nation-status-crapped/
articleshow/68018002.cms; and Joanna Slater, “India Strikes Pakistan in Severe Escalation of Tensions between Nuclear Rivals,” Washington
Post, February 26, 2019, https://www.washingtonpost.com/world/pakistan-says-indian-fighter-jets-crossed-into-its-territory-and-carried-
out-limited-airstrike/2019/02/25/901f3000-3979-11e9-a06c-3ec8ed509d15_story.html.

Counterbalancing China’s Growing Power and Influence
China’s emergence as a military superpower on India’s northern border and its close relations
with several of India’s neighbors in South Asia have caused concern in New Delhi. India’s
response has included several elements. One has been to strengthen the military infrastructure
along the border with China so as to deter Beijing from taking advantage of China’s growing
military capabilities to conduct cross-border incursions or seize Indian-controlled territory. A
second element has been to strengthen defense ties with other Indo-Pacific powers, especially the
United States but also Japan, Australia, Indonesia, and Vietnam. Stronger defense ties serve both
to increase India’s actual and perceived military capabilities and to force China to devote more
strategic attention to those other Indo-Pacific nations. A third element has been efforts to improve
India’s capability to conduct military operations in the Indian Ocean. Indian strategists recognize
that China is dependent on sea lines of communication that pass through the Indian Ocean and
that this is an area where India enjoys the advantage of proximity. As a result, India has been
increasing its naval capabilities and upgrading its bases in the Andaman and Nicobar Islands. It
also acquired economic and military access to the Indonesian island of Sabang off the northern
tip of Sumatra in return for investing in Sabang’s port and economic zone and building a hospital.
These counterbalancing efforts have not precluded India from cooperating with China in other
areas, however. India has coordinated efforts with China on issues such as climate change, trade
negotiations, and energy. China has become India’s largest trade partner, although the Indian
government complains about the significant trade imbalance in favor of China. Moreover, as is
described further below, India has willingly joined several new international organizations that
China has created, including the SCO, AIIB, and New Development Bank.60
Increasing India’s Influence in the Indian Ocean Region

The Indian government has also sought to increase India’s overall influence in Asian and African
countries bordering the Indian Ocean, with particular focus on its immediate neighborhood in
South Asia. One aspect of this strategy has been the creation of organizations and dialogues such
as the Indian Ocean Rim Association and the Indian Ocean Naval Symposium. Another aspect
has been efforts to improve the trade and infrastructure linkages with India’s neighbors. Other
initiatives to improve relations with South Asian and African countries have included reaching an
agreement with Bangladesh on their shared border, providing significant development assistance
to Bhutan, providing maritime security aid to Mauritius, and convening a series of India-Africa
Forum Summits. India has also sought to strengthen relations with other parts of Asia, particularly
Southeast Asian countries and Japan, through participation in forums and groupings such as
the Conference on Interaction and Confidence Building Measures in Asia, SCO, Association of
Southeast Asian Nations (ASEAN) Regional Forum, and East Asia Summit.61
60 Khilnani et al., “Nonalignment 2.0,” 13–15, 40–42; Pant, Indian Foreign Policy, 13–15, 38–47, 228–29; Ayers, Our Time Has Come, 101–8,
126–29; Rej, “Modi’s Victory,” 4; and Pramit Pal Chaudhuri, “Indonesia Gives India Access to Strategic Port of Sabang,” Hindustan
Times, May 17, 2018, https://www.hindustantimes.com/india-news/indonesia-gives-india-access-to-strategic-port-of-sabang/story-
KPXWKy7PGAHFUi0jCL26yJ.html.
61 Khilnani et al., “Nonalignment 2.0,” 12–13, 15–17, 23, 38; Mohan, “India’s Changing Geopolitics,” 25; Pant, Indian Foreign Policy, 94–189;
Jaishankar, “Indian Strategy,” 284; Pande, From Chanakya to Modi, 5–6, 9–10, 14–15, 103–6; Ayers, Our Time Has Come, 102, 108; 172–78;
Rej, “Modi’s Victory,” 2, 3; and “Act East Policy,” Ministry of Foreign Affairs (India), Press Release, December 23, 2015, http://pib.nic.in/
newsite/PrintRelease.aspx?relid=133837.
CHAPTER 3 u CLIFF
49
Increasing Its Influence through New and Existing International Organizations
Consistent with the belief that India should be regarded as one of the leading powers of
the world, Indian leaders have pushed for the country to play a leading role in international
organizations. They would particularly like for India to become a permanent member of the UN
Security Council but also have sought a greater voice in organizations such as the World Bank and
the IMF as well as membership in major arms control organizations such as the Missile Technology
Control Regime, Nuclear Suppliers Group, Wassenaar Arrangement, and Australia Group.62
Although Indian leaders view China with suspicion, India has willingly joined many
international organizations that China has initiated, such as the SCO, AIIB, and New Development
Bank. It has done so for the same reason that China created them: the opportunity to participate
in international organizations in which it has a greater voice than it does in older organizations
that are still dominated by North America, Europe, and Japan. India has also been instrumental
in the creation of other new organizations and dialogues, such as the BRICS summits, East Asia
Summit, Indian Ocean Naval Symposium, and Indian Ocean Rim Association.63
Increasing India’s International Prestige

The Indian government has sought to increase India’s international prestige in part by promoting
its cultural and political contributions to the world. For example, in 2014 India convinced the
United Nations to declare June 21 the International Day of Yoga, and in 2016 it hosted the first
World Sufi Forum in New Delhi in an effort to highlight India’s role in the development of Islamic
culture. Its movie industry and status as a democracy are also considered sources of prestige
and influence.64
India’s reputation for democracy has been damaged by recent actions by the Modi government,
however. In August 2019, it formally denied citizenship to nearly two million mostly Muslim
residents of the eastern state of Assam who were unable to prove that they had immigrated from
Bangladesh prior to Bangladesh’s independence from Pakistan in 1974. In October 2019 the Indian
government revoked the autonomous status of the former state of Jammu and Kashmir, India’s
only Muslim-majority state. And in December 2019, India’s parliament passed the Citizenship
Amendment Act, which provides citizenship to non-Muslim refugees from Pakistan, Bangladesh,
and Afghanistan but not to Muslim refugees from those or any other countries.65
Japan
Like India, Japan is a democracy in which the ruling party is subject to change, and thus its
external strategy is subject to change as well. The last change of ruling party in Japan occurred in
December 2012, when the Liberal Democratic Party took back control of the lower house of Japan’s
parliament from the Democratic Party of Japan, which had held power since 2009. Despite these
62 Pant, Indian Foreign Policy, 212–28; Pande, From Chanakya to Modi, 7–8, 107, 111–13; and Ayers, Our Time Has Come, 97–101, 163–68.
63 Pant, Indian Foreign Policy, 75–7; Pande, From Chanakya to Modi, 113–14; and Ayers, Our Time Has Come, 101, 164, 168–76.
64 Khilnani et al., “Nonalignment 2.0,” 13; Jaishankar, “Indian Strategy,” 279; Pande, From Chanakya to Modi, ix–x, 7, 15, 100–103; Ayers, Our
Time Has Come, 62–65, 121–24; and Rej, “Modi’s Victory,” 2.
65 “Assam NRC: What Next for 1.9 Million ‘Stateless’ Indians?” BBC News, August 31, 2019, https://www.bbc.com/news/world-asia-india-49520593;
Hannah Ellis-Petersen and a reporter in Srinagar, “India Strips Kashmir of Special Status and Divides It in Two,” Guardian, October 31, 2019,
https://www.theguardian.com/world/2019/oct/31/india-strips-kashmir-of-special-status-and-divides-it-in-two; and “Citizenship Amendment
Bill: India’s New ‘Anti-Muslim’ Law Explained,” BBC News, December 11, 2019, https://www.bbc.com/news/world-asia-india-50670393.

changes of ruling party, however, Japan’s foreign policy has been largely consistent over this time
period. It seems likely that this consistency will continue after current prime minister Shinzo Abe
steps down in 2021, regardless of which party or faction takes power at that point.66
Over the next decade, any government is likely to perceive a similar set of interests for Japan.
As with most countries, chief among these will be national security. Although there currently does
not appear to be any threat to Japan’s existence as a sovereign, independent state, security includes
several other elements for Japan. One is maintaining territorial integrity. Several countries claim
territory that Tokyo regards as belonging to Japan. Specifically, Russia still holds four islands off of
Japan’s northeastern coast that it claims are part of Russia’s Kuril Islands, but which Tokyo asserts
are Japanese territory and calls the Northern Territories. The Soviet Union seized the islands from
Japan at the end of World War II, at which time they had a population of approximately 17,000
Japanese citizens (who were subsequently deported to Japan). Similarly, North and South Korea
both claim, and South Korea controls, the uninhabited Dokdo in the Sea of Japan, which Tokyo
also regards as Japanese territory and calls the Takeshima. Most significantly, China and Taiwan
claim, although Japan currently controls, the currently uninhabited Senkaku Islands, which Beijing
and Taipei call the Diaoyu Islands. In addition, Chinese government researchers have argued that
Japan’s southwestern Ryukyu Islands, which include Okinawa, were historically a Chinese vassal
state, implying that they should now be either an independent nation or else part of China.67
Another element of Japan’s security interests is protecting the physical safety of its nationals
and their property. Although no country currently appears to have the intention to invade Japan,
North Korea’s ballistic missiles and nuclear, biological, and chemical weapons are threats to the
lives and property of people living in Japan. In addition, Japanese nationals could be victims of
terrorist attacks, either within Japan or abroad.68
A final aspect of Japan’s security interests is preserving the country’s democracy, culture, and
values. The Abe administration’s official National Security Strategy explicitly identifies Japan’s
national interests as including maintaining the country’s freedom and democracy and preserving
its “rich culture and tradition.” Similarly, an essay on Japan’s grand strategy by Nobukatsu
Kanehara, until recently deputy secretary general of the National Security Secretariat, states that
the country’s national interests encompass “the value system that the state and its people uphold,”
including a love of humanity, the rule of law, democracy, and a market economy and free trade.69
A second important national interest for Japan is prosperity. According to Kanehara and the
Japanese government, this depends on the continuance of an open free-trade system; a stable,
66 Richard Samuels, “Evolution of Japan’s Grand Strategy,” East Asia Forum, June 4, 2013, https://www.eastasiaforum.org/2013/06/04/
evolution-of-japans-grand-strategy; and “Abe Rules Out Fourth Term as Head of Japan’s LDP amid Talk of Tweaking Rules to Allow
Another Run,” Japan Times, March 14, 2019, https://www.japantimes.co.jp/news/2019/03/14/national/politics-diplomacy/abe-rules-fourth-
term-head-japans-ldp-amid-talk-tweaking-rules-allow-another-run/#.XJ6OuqR7mUl.
67 “Kuril Islands Dispute between Russia and Japan,” BBC News, April 29, 2013, https://www.bbc.com/news/world-asia-pacific-11664434;
Prime Minister of Japan and His Cabinet, National Security Strategy (Tokyo, December 2013), 4, http://japan.kantei.go.jp/96_abe/
documents/2013/__icsFiles/afieldfile/2013/12/17/NSS.pdf; Nobukatsu Kanehara, “Japan’s Grand Strategy—State, National Interests and
Values,” Japan Institute of International Affairs, 2011, 3–4, https://www2.jiia.or.jp/en/pdf/digital_library/japan_s_diplomacy/160325_
Nobukatsu_Kanehara.pdf; “Profile: Dokdo/Takeshima Islands,” BBC News, August 10, 2012, https://www.bbc.com/news/world-
asia-19207086; Tim Liao, “Why China, Japan and Korea Fuss over Tiny Islands—4 Things to Know,” Washington Post, April 17, 2018,
https://www.washingtonpost.com/news/monkey-cage/wp/2018/04/17/why-japan-is-making-a-big-fuss-over-tiny-islands-4-things-to-
know; and Frank Ching, “Ryukyu Sovereignty Question Simmers in China,” Japan Times, May 16, 2013, https://www.japantimes.co.jp/
opinion/2013/05/16/commentary/japan-commentary/ryukyu-sovereignty-question-simmers-in-china/#.XKJZyaR7mUk.
68 Prime Minister of Japan and His Cabinet, National Security Strategy, 4, 18; and Kanehara, “Japan’s Grand Strategy,” 3–4.
69 Prime Minister of Japan and His Cabinet, National Security Strategy, 4; and Kanehara, “Japan’s Grand Strategy,” 3, 11–19.
CHAPTER 3 u CLIFF
51
transparent, and predictable international environment; stable markets for natural resources,
particularly energy supplies; and secure sea lanes.70
A third interest that informs national strategy is building Japan’s status as one of the leading
powers of the world. Japan has long had one of the world’s largest economies and defense budgets.
Nonetheless, outside of the economic realm, Japan was relegated to a secondary status in world
affairs, expected only to finance decisions made by the other powers. While this was in part the
result of deliberate policy choices Japanese leaders had made in the aftermath of World War II,
in recent years, and particularly since the beginning of the second Abe administration in 2012,
Japanese leaders have actively sought to change this situation by increasing Japan’s international
stature and influence.71
Any Japanese government over the coming decade is likely to pursue the primary national
interests described above, although they may differ from the current administration in the degree
to which individual interests are emphasized. Japan’s national strategy, therefore, is likely to be
stable as well. Indeed, many of the foreign policy changes implemented by the Abe administration
were actually initiated during the preceding Democratic Party of Japan government.72 Thus, over
the next decade the country’s national strategy will likely continue to include the following main
elements: gradually increasing national security capabilities, strengthening the alliance with the
United States, expanding security relations with other Indo-Pacific nations, playing a greater role
in international security and stability, increasing Japan’s influence in international organizations,
and strengthening the liberal economic order.
Gradually Increasing National Security Capabilities

Severe budget deficits, the public’s continuing antimilitarism, and sensitivity to regional
perceptions that Japan is rearming will constrain the rate at which Japan’s national security
capabilities will improve. Yet both the now-defunct Democratic Party of Japan, when it was in
power, and the currently ruling Liberal Democratic Party have demonstrated a commitment to
increasing Japan’s strength in this area. Although the Japanese government has been at pains to
emphasize that these improvements will have the effect of strengthening the U.S.-Japan alliance,
they will also reduce Japan’s military dependence on the United States and provide the Japanese
military with the capability to conduct what could be regarded as offensive operations. This
includes acquiring strike aircraft capable of operating from helicopter carriers, long-range missiles
capable of striking targets on the Asian mainland, and amphibious invasion capabilities.73
Improvements to Japan’s national security capabilities will not be limited to the military,
moreover. The Japan Coast Guard, for example, which is responsible for policing the territorial
70 Prime Minister of Japan and His Cabinet, National Security Strategy, 4; Kanehara, “Japan’s Grand Strategy,” 9–11; and Ministry of Foreign
Affairs (Japan), Diplomatic Bluebook 2018 (Tokyo, September 2018), 6, https://www.mofa.go.jp/fp/pp/page25e_000237.html.
71 The Abe administration’s National Security Strategy states that “Japan should play an even more proactive role as a major global player.” Prime
Minister of Japan and His Cabinet, National Security Strategy, 1. See also Christopher W. Hughes, “Japan’s Grand Strategic Shift: From the
Yoshida Doctrine to an Abe Doctrine?” in Strategic Asia 2017–18: Power, Ideas, and Military Strategy, ed. Ashley J. Tellis, Alison Szalwinski, and
Michael Wills (Seattle: NBR, 2017); and Kenneth B. Pyle, “The Sea Change in Japanese Foreign Policy,” NBR, NBR Analysis Brief, June 17, 2014.
72 Hughes, “Japan’s Grand Strategic Shift,” 95, 102–5; and Samuels, “Evolution of Japan’s Grand Strategy,” 2.
73 For more information on Japan’s national security strategy, see Ministry of National Defense (Japan), National Defense Program Guidelines
for FY 2019 and Beyond (Tokyo, December 2018), 9–10, 21–22, https://www.mod.go.jp/j/approach/agenda/guideline/2019/pdf/20181218_e.
pdf; Ministry of National Defense (Japan), Medium Term Defense Program (FY 2019–FY 2023) (Tokyo, December 2018), 10–15, https://
www.mod.go.jp/j/approach/agenda/guideline/2019/pdf/chuki_seibi31-35_e.pdf; Hughes, “Japan’s Grand Strategic Shift,” 77–80, 99–100;
Prime Minister of Japan and His Cabinet, National Security Strategy, 14–20; Pyle, “The Sea Change in Japanese Foreign Policy,” 2; and
Shinichi Fujiwara, “Japan Deploying Longer-Range Missiles to Counter China,” Asahi shimbun, April 30, 2019, http://www.asahi.com/ajw/
articles/AJ201904300006.html.

waters around the Senkaku Islands, has received significant budget increases in recent years that
have supported the acquisition of additional patrol ships and aircraft.74
Strengthening the Alliance with the United States

The United States, Japan’s only treaty ally, remains the country’s primary guarantor of security.
The Japanese government, therefore, has been seeking to further strengthen its alliance with the
United States. One action taken to advance this goal was reinterpreting the constitution in 2014
to allow for the possibility of collective self-defense, meaning that Japan could use its military to
defend U.S. forces under certain circumstances other than a direct attack on Japanese territory.
In 2015 the Abe administration also enacted laws that increased the degree to which Japan
could provide noncombat logistical support to the United States or multinational coalitions
and that allowed the Japan Self-Defense Forces to use force in the conduct of their duties during
UN peacekeeping operations. In addition, in 2015, Japan completed negotiation of a new set of
defense cooperation guidelines with the United States (the first since 1997) that enable closer
military cooperation, including in areas such as training; sharing of intelligence, surveillance, and
reconnaissance information; the shared use of facilities; development and acquisition of weapon
systems; personnel exchanges; and technology cooperation. Meanwhile, the Japanese government
has sought to limit domestic opposition to the presence of U.S. forces, in particular by funding
the relocation of the Marine Corps Air Station currently at Futenma, Okinawa, to a less populated
area of that island.75
Expanding Security Relations with Other Indo-Pacific Nations

While strengthening relations with Japan’s only formal ally, Japanese leaders have been seeking
to broaden the country’s security network by expanding relations with other countries in the
Indo-Pacific, particularly South Korea, Australia, the countries of ASEAN, and India. In the case
of South Korea this has included attempts to resolve the long-standing “comfort women” issue,
mutual sharing of intelligence information, and participation in trilateral military exercises with
South Korea and the United States.76 In the case of Australia, the two countries have held joint
foreign and defense minister meetings since 2007, signed an agreement authorizing the transfer of
defense equipment and technology in 2014, and reached a revised acquisition and cross-servicing
agreement in 2017 that allows them to provide ammunition and other defense supplies to each
other. Japan and Australia are also seeking to conclude a reciprocal access agreement that would
facilitate joint military exercises and other activities between their defense forces.77
74 “Japan Readies Biggest-Ever Coast Guard Budget,” Nikkei Asian Review, December 13, 2016, https://asia.nikkei.com/Politics/Japan-readies-
biggest-ever-coast-guard-budget; and Jay Tristan Tarriela, “How Abe Remade the Japan Coast Guard,” Diplomat, January 24, 2019, https://
thediplomat.com/2019/01/how-abe-remade-the-japan-coast-guard/.
75 Prime Minister of Japan and His Cabinet, National Security Strategy, 20–23; Ministry of Foreign Affairs (Japan), Diplomatic Bluebook 2018,
6, 9–10; Hughes, “Japan’s Grand Strategic Shift,” 100–102; “Joint Statement of the Security Consultative Committee,” Ministry of Defense
(Japan), April 27, 2015, https://www.mod.go.jp/e/d_act/anpo/js20150427e.html.
76 Prime Minister of Japan and His Cabinet, National Security Strategy, 17, 23–25; Hughes, “Japan’s Grand Strategic Shift,” 98; and Eric
Heginbotham and Richard Samuels, “With Friends Like These: Japan-ROK Cooperation and U.S. Policy,” Asan Forum, March 1, 2018, http://
www.theasanforum.org/with-friends-like-these-japan-rok-cooperation-and-us-policy. In late 2019, South Korea threatened to withdraw from
the intelligence-sharing arrangement with Japan but ultimately decided to continue it. “South Korea to Continue Intelligence-Sharing Pact
with Japan,” BBC News, November 23, 2019, https://www.bbc.com/news/world-asia-50526883.
77 “Japan-Australia Relations (Archives),” Ministry of Foreign Affairs (Japan), https://www.mofa.go.jp/region/asia-paci/australia/archives.html;
and “Japan, Australia Agree to Boost Defense Cooperation amid Rising China,” Nikkei Asian Review, November 16, 2018, https://asia.nikkei.
com/Politics/International-relations/Japan-Australia-agree-to-boost-defense-cooperation-amid-rising-China.
CHAPTER 3 u CLIFF
53
Japan’s efforts to strengthen security relations with ASEAN countries have involved both
ASEAN as an organization and individual member countries. The former have included
biannual meetings between Japanese and ASEAN defense ministers held since 2014, a joint work
plan for combating terrorism and transnational crime agreed to in 2015, and over $600 million
in funding to support maritime cooperation, disaster management, and efforts to combat
terrorism and transnational crime. In 2016, Japan announced the Vientiane Vision to support
ASEAN efforts to uphold principles of international law, particularly with regard to maritime
areas and airspace, and to improve intelligence, surveillance and reconnaissance, search and
rescue, and other capabilities. This has included bilateral and multilateral training; visits by
Japanese naval ships and aircraft; defense equipment and technology cooperation; exchanges on
topics such as underwater medicine, oceanography, and humanitarian assistance and disaster
relief; and seminars on international maritime and aviation law. Efforts involving individual
ASEAN countries have included bilateral meetings between defense ministers, joint navy and
coast guard exercises, and the provision of coast guard and navy patrol boats to Vietnam, the
Philippines, and Malaysia.78
Japan’s efforts to improve security relations with India include annual defense minister
meetings, joint staff talks and exercises between their militaries and coast guards, the signing of
protocols to enable the transfer of defense equipment and technology, and joint measures to protect
classified military information. In 2016 the two countries signed an agreement on civil nuclear
cooperation that will enable Japanese companies to build nuclear power plants and sell reactor
parts and equipment in India. Japan has also been providing India with significant economic
assistance, including progressively larger currency-swap arrangements to ensure the stability of
the Indian rupee. In addition, it has supplied several billion dollars in funding at reduced interest
rates for infrastructure projects, especially in India’s northeast, where the dispute with China over
Arunachal Pradesh has deterred other countries from investing.79
Playing a Greater Role in International Security and Stability

Japan’s government has sought to play a greater role in international security and stability
efforts. This has included growing, albeit still limited, participation in UN peacekeeping operations
(such as in South Sudan) as well as funding of peacekeeping training centers in Asia and Africa and
financial contributions to humanitarian assistance and peacebuilding efforts. It has also included
78 “JAIF 2.0,” Japan-ASEAN Integration Fund, https://jaif.asean.org/jaif2.html; “Tokyo to Invite Asean Air Force Officers to Watch Japan’s Military
Training,” South China Morning Post, October 20, 2018, https://www.scmp.com/news/asia/southeast-asia/article/2169475/tokyo-invite-asean-
air-force-officers-watch-japans-military; “Overview of ASEAN-Japan Dialogue Relations,” ASEAN, August 16, 2018, https://asean.org/wp-
content/uploads/2012/05/Overview-ASEAN-Japan-Relations-As-of-16-August-2018-rev.pdf; “Vientiane Vision: Japan’s Defense Cooperation
Initiative with ASEAN,” Ministry of Defense (Japan), https://www.mod.go.jp/e/d_act/exc/vientianevision; “Achievements of Japan-ASEAN
Defense Cooperation Based on the Vientiane Vision,” Ministry of Defense (Japan), October 2017, https://www.mod.go.jp/e/d_act/exc/
vientianevision/pdf/achivements_201710_e.pdf; Daniel Hurst, “Japan, Indonesia Strengthen Maritime Ties amid 60th Anniversary,” Diplomat,
June 29, 2018, https://thediplomat.com/2018/06/japan-indonesia-strengthen-maritime-ties-amid-60th-anniversary; “Philippine Coast Guard
to Host Bilateral Exercise with Japan Coast Guard,” Philippine Coast Guard, Press Release, July 11, 2016, http://www.coastguard.gov.ph/index.
php/transparency/functions/marsec/11-news/1288-philippine-coast-guard-to-host-bilateral-exercise-with-japan-coast-guard; “PCG-JCG
Conducts Joint Anti-Piracy Measures in Davao Oriental,” Philippine Coast Guard, Press Release, July 7, 2018, http://www.coastguard.gov.ph/
index.php/transparency/functions/marsec/11-news/2211-pcg-jcg-conducts-joint-anti-piracy-measures-in-davao-oriental; “Japan-Indonesia
Foreign and Defense Ministerial Meeting,” Ministry of Foreign Affairs (Japan), December 18, 2015, https://www.mofa.go.jp/s_sa/sea2/id/
page3e_000437.html; “Japan Steps Up Maritime Engagement with Philippines, Vietnam,” Reuters, May 12, 2016, https://www.reuters.com/
article/us-southchinasea-japan-drills/japan-steps-up-maritime-engagement-with-philippines-vietnam-idUSKBN0NX0LA20150512; “Japan
Gives Malaysia Two Patrol Boats,” Reuters, November 16, 2016, https://www.reuters.com/article/us-japan-malaysia/japan-gives-malaysia-two-
patrol-boats-idUSKBN13B0X4; and “Japan Pledges Boats to Vietnam as China Dispute Simmers,” Reuters, January 16, 2017, https://www.
reuters.com/article/us-vietnam-japan/japan-pledges-boats-to-vietnam-as-china-dispute-simmers-idUSKBN15015O.
79 Thomas F. Lynch, “The Growing Entente between India and Japan,” National Interest, February 14, 2019, https://nationalinterest.org/feature/
growing-entente-between-india-and-japan-44567; and “India, Japan Sign $75 Billion Currency Swap Agreement,” Economic Times, October
30, 2018, https://economictimes.indiatimes.com/articleshow/66415790.cms.

support to a range of disarmament and nonproliferation initiatives, but also international efforts
to combat terrorism, piracy, and organized crime. Japan is also a strong diplomatic supporter of
international legal institutions for the peaceful resolution of disputes, such as the International
Court of Justice and the International Tribunal for the Law of the Sea.80
Increasing Japan’s Influence in International Organizations

Like India, Japan seeks to become a permanent member of the UN Security Council. In the
meantime, Japan has been playing a more active role in UN activities such as peacekeeping
operations, the Preparatory Committee for the 2020 Non-Proliferation Treaty Review Conference,
the Conference on Facilitating the Entry into Force of the Comprehensive Nuclear-Test-Ban Treaty,
the Non-Proliferation and Disarmament Initiative, the 2030 Agenda for Sustainable Development,
and the Conference of the Parties to the 1992 UN Framework Convention on Climate Change.81
Strengthening the Liberal Economic Order

Japan’s future prosperity depends on a continuation and expansion of the open world economic
order and Japanese participation in it. To this end, the country has been seeking to reach multiple
bilateral and multilateral FTAs, with the stated goal of having 70% of the value of its international
trade covered by such agreements, as compared to 19% in 2012. Achievements in this domain
include the conclusion and entry into force in the past two years of an economic partnership
agreement with the European Union and the Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP, formerly called the Trans-Pacific Partnership) with ten other
Pacific Rim countries. In addition, Japan has been seeking to conclude the RCEP with the ten
ASEAN members along with Australia, China, India, New Zealand, and South Korea, as well as
a trilateral FTA with South Korea and China, and is engaged in exploratory discussions with the
members of the Asia-Pacific Economic Cooperation (APEC) regarding the proposed Free Trade
Area of the Asia-Pacific. Japan is also pursuing bilateral FTAs with several countries, including
South Korea, Canada, Colombia, and Turkey, and bilateral investment treaties and taxation and
social security agreements with numerous others.82 Finally, Japan has been playing a more active
role in the G-7 and the Organisation for Economic Co-operation and Development (OECD) and
has sought to increase the number of Japanese nationals working in these organizations.
Indonesia
Indonesia’s current president, Joko Widodo (known as Jokowi), was re-elected for another
five-year term in April 2019. Barring dramatic events in Indonesia’s domestic politics or external
environment in the interim, therefore, its national strategy is likely to remain stable until at least
the middle of this decade. Term limits mean that Jokowi will be required to step down in 2024, and
80 Prime Minister of Japan and His Cabinet, National Security Strategy, 4–5, 28–31; and Ministry of Foreign Affairs (Japan), Diplomatic
Bluebook 2018, 14–16, 204–40, 251–53.
81 Prime Minister of Japan and His Cabinet, National Security Strategy, 15, 28–31; and Ministry of Foreign Affairs (Japan), Diplomatic
Bluebook 2018, 14–19.
82 Prime Minister of Japan and His Cabinet, National Security Strategy, 4, 33–34; Ministry of Foreign Affairs (Japan), Diplomatic Bluebook
2018, 12–14, 304–17; James McBride and Andrew Chatzky, “What Is the Trans-Pacific Partnership (TPP)?” CFR, January 4, 2019,
https://www.cfr.org/backgrounder/what-trans-pacific-partnership-tpp; and “Explained: Regional Comprehensive Economic Partnership
(RCEP),” South China Morning Post, February 19, 2019, https://www.scmp.com/week-asia/explained/article/2186777/explained-regional-
comprehensive-economic-partnership-rcep.
CHAPTER 3 u CLIFF
55
it is possible that the administration that follows will pursue a fundamentally different strategy
for the nation. Since Indonesia achieved formal independence in 1949, however, there have been
certain constants in its foreign policy that will likely persist after 2024.
Indonesia’s current national strategy can be said to have three principal goals: security,
economic development, and maintaining independence and autonomy. The country’s security
concerns are relatively minor. Although Indonesia has some boundary disputes with Malaysia,
its relations with its neighbors have long been peaceful, and no country occupies or has any
significant claims on Indonesian territory. Nonetheless, the territorial disputes in the South China
Sea do affect Indonesia. While Jakarta is not party to the disputes over the ownership of islands in
the South China Sea, China has claimed that portions of Indonesia’s exclusive economic zone near
the Natuna Islands are its traditional fishing grounds. Indonesian leaders are also concerned more
generally by the prospect of most of the South China Sea falling under Chinese control, given that
some of the world’s most important shipping routes, including those linking Indonesia to East
Asia, pass through the area.83 A second security concern for Indonesia is transnational crime. This
includes piracy, the smuggling of people and narcotics, and illegal fishing.84
A third and potentially more serious security threat is Islamic extremism. Although most
Indonesians subscribe to a moderate form of Islam, conservative forces have been gaining strength
in recent years, and militants pledging allegiance to the Islamic State have carried out terrorist
attacks in Indonesia. Nonetheless, Islamist violence in Indonesia has been relatively limited since
the early 2000s. From 2006 to 2017, fewer than thirteen people died on average each year as a result
of reported terrorist attacks, with under half of those fatalities resulting from attacks known or
suspected to have been perpetrated by Islamist organizations.85
The primary goal of Indonesia’s national strategy is economic development. When Jokowi
was first elected president in 2014, he set a goal of increasing the country’s economic growth rate
to 7% a year from about 5.5% in 2013. This goal was not achieved during Jokowi’s first term (in
fact, the average rate of economic growth fell to around 5% a year), but he continues to seek to
increase Indonesia’s growth rate and has emphasized exports and inbound investment as key
to achieving this goal.86 As one observer put it, Jokowi’s “foreign trips and speeches [are] aimed
not at promoting Indonesian diplomacy, or taking a stand on issues such as the South China Sea
crisis…but attracting foreign investment for his massive infrastructure development plans.”87
A third goal of Indonesia’s national strategy under multiple leaders since the 1960s has been
preserving the nation’s independence and autonomy. As a founding member of the Non-Aligned
Movement, Indonesia has long pursued a foreign policy of neutrality and independence, often
83 Balaji Chandramohan, “Indonesia’s Evolving Grand Strategy: Foreign Powers,” Future Directions International, Strategic Analysis Paper, May 8,
2014, 5, http://www.futuredirections.org.au/publication/indonesia-s-evolving-grand-strategy-foreign-powers; and Joshua Kurlantzick, “Keeping
the U.S.-Indonesia Relationship Moving Forward,” CFR, Special Report, February 2018, 9–11, https://cfrd8-files.cfr.org/sites/default/files/
report_pdf/CSR81_Kurlantzick_Indonesia_With%20Cover.pdf.
84 Kurlantzick, “Keeping the U.S.-Indonesia Relationship Moving Forward,” 11; and Lyle J. Morris and Giacomo Persi Paoli, A Preliminary
Assessment of Indonesia’s Maritime Security Threats and Capabilities (Santa Monica: RAND Corporation, 2018), 24–26. In the past, regional
separatist movements were a significant concern for the Indonesian government. Timor-Leste was granted independence in 1999, however,
and the separatist conflict in Aceh ended in 2005 with the signing of a peace accord giving Aceh a significant degree of autonomy and a
share of the revenues from Indonesia’s extraction of natural resources in the province. The primary remaining separatist movement in
Indonesia is in Papua (formerly Irian Jaya).
85 Morris and Paoli, Indonesia’s Maritime Security Threats, 11–13; and National Consortium for the Study of Terrorism and Responses to
Terrorism, Global Terrorism Database, https://www.start.umd.edu/gtd.
86 Viriya Singgih and Karlis Salna, “Jokowi Seeks Spending Boost as Indonesia Targets Higher Growth,” Bloomberg, April 23, 2019, https://
www.bloomberg.com/news/articles/2019-04-23/jokowi-seeks-spending-boost-as-indonesia-targets-higher-growth.
87 Nithin Coca, “Indonesia’s Domestically Focused Foreign Policy,” Lowy Institute, Interpreter, February 19, 2019, https://www.lowyinstitute.
org/the-interpreter/indonesia-domestically-focused-foreign-policy.

referred to as a “free and active” foreign policy. During the Cold War, this entailed avoiding an
alliance with either the United States or the Soviet Union. Since the end of the Cold War, it has
meant a commitment to maintaining good relations with all countries, but also a reluctance to
open the country up to foreign influence in areas such as commerce or human rights.88
Significantly, ideational goals such as increasing Indonesia’s international prestige, seeking to
become a leader among Muslim nations, and promoting democracy have not been a significant
part of Indonesia’s national strategy under Jokowi. This is consistent with a long-standing
Indonesian tradition of pragmatic diplomacy that focuses on securing concrete benefits for the
country. Jokowi’s predecessor, Susilo Bambang Yudhoyono, however, was more active in promoting
Indonesia’s role as a regional leader. For example, he initiated the annual Bali Democracy Forums
for nations from Asia and the Indian and Pacific Oceans, which have continued under Jokowi.
Even Yudhoyono’s efforts were restrained, though, as Indonesia sought to avoid being perceived as
interfering in the internal affairs of other countries.89
Therefore, for the remainder of Jokowi’s term as president, and possibly under his successors as
well, Indonesia’s national strategy is likely to consist of the following main elements: promoting
economic development, maintaining a low international profile and continuing nonalignment,
and limiting defense spending.
Promoting Economic Development

Jokowi has made it clear that his highest priority for the country is economic development.
Even his signature Global Maritime Fulcrum vision for Indonesia, initially assumed to refer to
Indonesia’s strategic role in the region, has turned out to be focused primarily on the country’s
economic development. For the remainder of his tenure and possibly beyond, therefore, Indonesia’s
external behavior will be oriented primarily toward the goal of promoting economic growth.
Economic development will not be promoted at the expense of Indonesia’s economic autonomy
and independence, however. A study by the OECD, for example, found that Indonesia’s rules on
FDI were the third most restrictive among the 68 high- and middle-income countries surveyed.
Based on statements that Jokowi made during his re-election campaign, moreover, there will likely
continue to be limits on foreign ownership in some economic sectors, and there may be additional
regulations on foreign investors in extractive industries such as mining and logging.90
88 Dewi Fortuna Anwar, “Indonesia’s Foreign Relations: Policy Shaped by the Ideal of ‘Dynamic Equilibrium,’ ” East Asia Forum, February 4,
2014, https://www.eastasiaforum.org/2014/02/04/indonesias-foreign-relations-policy-shaped-by-the-ideal-of-dynamic-equilibrium; Ted
Piccone and Bimo Yusman, “Indonesian Foreign Policy: ‘A Million Friends and Zero Enemies,’ ” Brookings Institution, February 14, 2014,
https://www.brookings.edu/articles/indonesian-foreign-policy-a-million-friends-and-zero-enemies; Brad Nelson and Yohanes Sulaiman,
“Searching for Indonesia’s Lost ‘Grand Strategy,’ ” Strategic Review 2, no. 3 (2012): 72; and Kurlantzick, “Keeping the U.S.-Indonesia
Relationship Moving Forward,” 8.
89 Nelson and Sulaiman, “Searching for Indonesia’s Lost ‘Grand Strategy’ ”; Anwar, “Indonesia’s Foreign Relations”; “Bali Democracy Forum,”
https://bdf.kemlu.go.id; Piccone and Yusman, “Indonesian Foreign Policy”; Chandramohan, “Indonesia’s Evolving Grand Strategy: Foreign
Powers,” 2–3; Yohanes Sulaiman, “Global Maritime Nexus: Towards a Grand Strategy for Indonesia?” RSIS, March 23, 2017, https://www.rsis.
edu.sg/rsis-publication/rsis/co17051-global-maritime-nexus-towards-a-grand-strategy-for-indonesia/#.XMs796R7lhE; Kurlantzick, “U.S.-
Indonesia Relationship Moving Forward,” 8; Coca, “Indonesia’s Domestically Focused Foreign Policy”; and Joshua Kurlantzick, “Indonesia’s
Election: What to Expect from Jokowi’s Second Term,” CFR, April 18, 2019, https://www.cfr.org/article/indonesias-election-what-expect-
jokowis-second-term.
90 Sulaiman, “Global Maritime Nexus”; Evan Laksmana, “Indonesian Sea Policy: Accelerating Jokowi’s Global Maritime Fulcrum?” CSIS, Asian
Maritime Transparency Initiative, March 23, 2017, https://amti.csis.org/indonesian-sea-policy-accelerating; Kurlantzick, “U.S.-Indonesia
Relationship Moving Forward,” 8, 14–15; Keoni Indrabayu Marzuki, “The Meaning of Indonesia’s Global Maritime Fulcrum,” Pacific
Forum, PacNet Commentary, February 22, 2018, https://www.pacforum.org/analysis/pacnet-14a-meaning-indonesia%E2%80%99s-global-
maritime-fulcrum; “Indonesia Update: Jokowi and Prabowo Release Campaign Platforms,” McLarty Associates, December 7, 2018, https://
maglobal.com/wp-content/uploads/2018/12/mclarty-update-jokowi-and-prabowo-release-campaign-platforms.pdf; “After Infrastructure,”
Economist, June 1, 2019, 60–61; and Kurlantzick, “Indonesia’s Election.”
CHAPTER 3 u CLIFF
57
Maintaining a Low International Profile and Continuing Nonalignment
Yudhoyono described the goal of his foreign policy as being to have “a million friends and
zero enemies.”91 Jokowi has taken this approach even further. In particular, he has avoided taking
sides in the rivalry between the United States and China. Although U.S.-Indonesia ties had
improved significantly during Yudhoyono’s term, they have stagnated since Jokowi took office.
Meanwhile, Jokowi has vigorously sought Chinese infrastructure investment, although he has
also been more assertive toward Chinese encroachments into Indonesian waters and occasionally
critical of China’s BRI. This effort to strike a balance between the two superpowers seems likely to
continue through his second term.92 Moreover, any successor will likely follow in the tradition of
maintaining a low international profile.93
Limiting Defense Spending

Indonesia’s spending on defense has remained modest since the late 1980s. The regulations
implementing the Global Maritime Fulcrum concept, issued in 2017, called for increasing the
number of ships in the Indonesian Navy, and Jokowi has indicated an intention to increase defense
spending to 1.5% of GDP. As of 2018, however, Indonesia’s defense spending was only 0.7% of GDP
and had actually fallen as a proportion of GDP over Jokowi’s time in office.94
North Korea
North Korea has been ruled by Kim Jong-un since the death of his father in 2011 and is likely
to remain under Kim Jong-un’s control so long as he is alive. There has been much speculation
about the state of Kim’s health, however, including conjectures that he suffers from diabetes and
hypertension.95 Thus, although he is believed to currently be in his mid-30s, it is possible that he
could die at some point in the next decade, which would almost certainly create a succession crisis
because any children he may have would probably still be minors at that point.96 If Kim were to die
or be overthrown in a coup at some time during the next decade, North Korea’s national strategy
could radically change. Until then, however, the country’s national strategy is likely to be fairly
consistent, although the tactics employed in pursuing that strategy may change over time.
Most observers agree that Kim’s overriding goal is to maintain his hold on power. Given how
he has dealt with his own rivals for power, including his half-brother and his uncle, Kim likely sees
91 Susilo Bambang Yudhoyono, “Address by the President of the Republic of Indonesia,” March 10, 2010, https://parlinfo.aph.gov.au/parlInfo/
search/display/display.w3p;query=Id:%22chamber/hansardr/2010-03-10/0047%22.
92 Kurlantzick, “U.S.-Indonesia Relationship Moving Forward,” 3, 9–10; David G Rose, “‘China Calls It Fishing, Indonesia Calls It Crime’:
Pudjiastuti Finds Her Target for Oceans Summit,” South China Morning Post, October 18, 2018, https://www.scmp.com/week-asia/
geopolitics/article/2169153/china-calls-it-fishing-indonesia-calls-it-crime-pudjiastuti; and Kurlantzick, “Indonesia’s Election.”
93 Anwar, “Indonesia’s Foreign Relations”; Nelson and Sulaiman, “Indonesia’s Lost ‘Grand Strategy,” 72–73; Chandramohan, “Indonesia’s
Evolving Grand Strategy”; Piccone and Yusman, “Indonesian Foreign Policy”; “Indonesia Update”; Kurlantzick, “Indonesia’s Election”; and
Coca, “Indonesia’s Domestically Focused Foreign Policy.”
94 Sulaiman, “Global Maritime Nexus”; Kurlantzick, “Keeping the U.S.-Indonesia Relationship Moving Forward,” 9; Marzuki, “The Meaning
of Indonesia’s Global Maritime Fulcrum”; Laksmana, “Indonesian Sea Policy”; Marzuki, “Indonesia’s Global Maritime Fulcrum Policy”; and
SIPRI Military Expenditure Database.
95 “Kim Jong-un—Health,” GlobalSecurity, https://www.globalsecurity.org/military/world/dprk/kim-jong-un-health.htm.
96 Kim Jong-un has stated that he has children, but details about them are not known. It is rumored that the oldest, a son, was born in 2010.
For more information, see Jack Kim, “North Korea’s Kim: I Don’t Want My Children to Bear Burden of Nuclear Arms—Report,” Reuters,
February 23, 2019, https://www.reuters.com/article/us-northkorea-usa-kim/north-koreas-kim-i-dont-want-my-children-to-bear-burden-
of-nuclear-arms-report-idUSKCN1QC0CZ; and Tom O’Connor, “Who Are Kim Jong Un’s Children and Does North Korea Have an Heir?”
Newsweek, December 30, 2017, https://www.newsweek.com/who-kim-jong-un-children-does-north-korea-have-heir-765818.

this as literally a matter of life and death. Thus, whether other interests are pursued will depend
almost entirely on what he perceives as their effects on his ability to hold on to power. For example,
multiple observers have argued that no amount of economic pressure will succeed in forcing
North Korea to give up its nuclear weapons program because Kim sees this program as essential to
the survival of the North Korean state and thus himself.97
However, the Kim regime also appears to view increasing North Korea’s prosperity as being
in its interest, as long as this does not undermine the government’s control over the country.
Economic growth provides the regime with increased revenues to support the development of
nuclear weapons and ballistic missiles as well as to maintain North Korea’s conventional military
forces, all of which increase the regime’s security against external threats. These revenues also
enable the leadership to enjoy material wealth and provide the country’s elites (such as government
officials, members of the Workers’ Party of Korea, managers of state-owned enterprises, and
officers in the Korean People’s Army) with reasonably comfortable lives, ensuring that they have a
stake in the continuation of the existing system. In addition, rising standards of living presumably
also improve the regime’s prestige and legitimacy among the broader population.98
Notably absent from the North Korean national priorities identified by most observers of the
country, despite official declarations from Pyongyang, is unification with South Korea.99 This
probably reflects a recognition of the unattainability of that goal on terms that would be acceptable
to the leadership. Few observers believe that North Korea has the capability to achieve unification
by force, given the antiquated state of its armed forces relative to those of South Korea and the
United States, nor would Seoul agree to a negotiated unification in which it was subordinate to
Pyongyang. The best that the North Korean leadership could hope for, therefore, would be some
form of largely symbolic unification that would allow Pyongyang to continue to govern the North
while Seoul continues to administer South Korea. A unification arrangement that would leave the
South outside Pyongyang’s control seems unlikely to significantly bolster the legitimacy of the
North Korean regime. Moreover, if it resulted in increased interactions between the populations of
the two countries, and the citizens of North Korea came to understand how deprived they were in
comparison to the South, unification could actually undermine the regime’s legitimacy.
Although Kim Jong-il also appeared to be pursuing the goals enumerated above, Kim Jong-un,
since taking over from his father, has been employing a strategy for advancing them that differs
in key ways. Given that both his father and his grandfather ruled North Korea until their deaths,
Kim will presumably seek to do so as well. Barring a coup, premature death, or regime collapse,
therefore, North Korea’s national strategy for the foreseeable future is likely to consist of the
following principal elements: acquiring and retaining the capability to attack the United States
with nuclear weapons, weakening and dividing international pressure, extracting economic
concessions from the outside world, and allowing limited expansion of the private economy.
97 Indeed, some have argued that economic sanctions on North Korea actually strengthen the regime’s hold on power. See Adam Mount and
Andrea Berger, “Report of the International Study Group on North Korea Policy,” Federation of American Scientists, 2019, 2–3, 6, https://fas.
org/wp-content/uploads/media/FAS-DPRK-SG.pdf, 21; John Hudson and David Francis, “Why Did Sanctions Fail against North Korea?”
Foreign Policy, September 9, 2016, https://foreignpolicy.com/2016/09/09/why-did-sanctions-fail-against-north-korea; Mira Rapp-Hooper,
“America Is Not Going to Denuclearize North Korea,” Atlantic, November 29, 2017, https://www.theatlantic.com/international/archive/2017/11/
north-korea-icbm-kim-trump-nuclear/547040; Andrei Lankov, “The Inconvenient Truth about North Korea and China,” Washington Post, June
15, 2017, https://www.washingtonpost.com/opinions/nothing-short-of-war-will-get-north-korea-to-give-up-its-nukes/2017/06/15/1ba427a0-
4b94-11e7-bc1b-fddbd8359dee_story.html; Yang Un-chul, “Introduction: Whither North Korea,” in Whither North Korea, ed. Yang Un-chul
(Seongnam City: Sejong Institute, 2018), 9; and Mark Tokola, “The Hanoi Summit: A Point on a Long North Korean Foreign Policy Line,” NBR,
Brief, March 11, 2019, https://www.nbr.org/publication/the-hanoi-summit-a-point-on-a-long-north-korean-policy-line.
98 Yang, “Whither North Korea,” 7–8; Mount and Berger, “Report of the International Study Group,” 6, 13; and Tokola, “The Hanoi Summit,” 3.
99 See, for example, Mount and Berger, “Report of the International Study Group,” 6.
CHAPTER 3 u CLIFF
59
Acquiring and Retaining the Capability to Attack the United States with
Nuclear Weapons
Kim Jong-un appears to believe that his regime faces an existential threat from the United
States and South Korea and, therefore, that North Korea needs an assured means of protecting
itself. The ability to attack South Korea with nuclear weapons, or even biological and chemical
weapons, which North Korea already possesses, is presumably sufficient to prevent the ROK
government from contemplating invading the North, but not necessarily to prevent the United
States from launching military strikes against the North Korean leadership or attempting
to foment a coup. The ability to attack the United States with nuclear weapons (along with a
carefully fostered reputation for irrationality and unpredictability) provides the regime with
the greatest ability to deter such threats. As a result, many observers believe that the leadership
sees possessing nuclear weapons and intercontinental ballistic missiles (ICBMs) as essential to
ensuring regime survival.100
The possession of nuclear weapons is probably seen as having the additional benefit of increasing
the regime’s prestige in the eyes of its domestic populace. North Korea is one of only a handful of
countries with nuclear weapons, and their acquisition has enabled Kim Jong-un to meet as an
equal with the leaders of the most powerful nations in the world. The prestige thus accrued may
help inoculate the regime against internal dissatisfaction and unrest.101 Although North Korea
had nuclear weapon and ballistic missile programs long before he became leader, the efforts to
develop these systems appear to have accelerated under his rule. As of this writing, North Korea
has not conducted a nuclear or ICBM test since 2017, but this may be because Pyongyang feels that
it has already demonstrated the capability to attack the United States with nuclear weapons and,
therefore, that the need for further testing is less urgent.102
Weakening and Dividing International Pressure

Due to the perceived hostility of the United States and South Korea, as well as economic pressure
from the United States and other countries, Pyongyang seeks to increase regime security by
weakening and dividing the international pressure on it. North Korea’s numerous tests of nuclear
weapons and ballistic missiles in recent years have resulted in stronger economic sanctions, which
even normally supportive China strictly enforced for a period of time. Thus, having apparently
succeeded in its drive to acquire the capability to attack the United States with nuclear weapons,
North Korea since 2018 has resumed its efforts to weaken and divide the forces arrayed against
it. This has entailed resuming discussions about eliminating its nuclear program and holding
summit meetings with the presidents of the United States, South Korea, and China—actions that
have resulted in China easing economic pressure on the North and the United States canceling
joint exercises with the ROK military. The failure to reach an agreement at the second Trump-Kim
100 Hudson and Francis, “Why Did Sanctions Fail against North Korea?”; Rapp-Hooper, “America Is Not Going to Denuclearize North Korea”;
Lankov, “The Inconvenient Truth about North Korea and China”; Yang, “Whither North Korea,” 9; and Mount and Berger, “Report of the
International Study Group,” 7–10.
101 Yang, “Wither North Korea” 10; Mount and Berger, “Report of the International Study Group,” 6; Anne Applebaum, “Trump and Kim Got
What They Wanted. The Rest of the World, Not So Much,” Washington Post, June 12, 2018, https://www.washingtonpost.com/news/global-
opinions/wp/2018/06/12/a-fantastic-meeting-for-trump-and-kim; and Gretchen Frazee, “How Far Off Is a Deal? 4 Takeaways from the
Trump-Kim Summit,” PBS NewsHour, February 28, 2019, https://www.pbs.org/newshour/world/how-far-off-is-a-deal-4-takeaways-from-
the-trump-kim-summit.
102 Lankov, “The Inconvenient Truth about North Korea and China”; and “North Korea,” Nuclear Threat Initiative, May 2019, https://www.nti.
org/learn/countries/north-korea.

summit in February 2019 was a setback to these efforts, but North Korea will undoubtedly
continue to seek ways to weaken and divide the international pressure on it.103
Extracting Economic Concessions from the Outside World

Although many observers believe that no amount of economic sanctions will force North Korea
to give up its nuclear weapons, this does not mean that the regime is not interested in economic
inducements. It clearly seeks to have the current economic sanctions lifted and to receive as much
foreign aid and investment as is possible, provided it is able to manage the social and political
effects. Although Kim’s offer at the February 2019 summit in Hanoi was too meager for Trump to
accept, the lifting of sanctions was one of the goals Kim was pursuing. North Korea’s eagerness to
resume negotiations has been demonstrated by the testing of short-range ballistic missiles in 2019
and early 2020, signaling Kim’s desire to negotiate sanctions relief and a peace agreement with
the United States. Pyongyang has also pushed for the reopening of the joint Kaesong Industrial
Complex, which was closed by the ROK government in 2016. The Kim regime was able to use
Kaesong to acquire foreign currency by requiring that compensation for North Korean workers be
given to the North Korean government rather than directly to the workers.104
Allowing Limited Expansion of the Private Economy

When it lost external support from the Soviet bloc after the collapse of Communism in
Eastern Europe in 1989, North Korea’s state-controlled economy shrank sharply and the country
experienced a severe famine. Since that time, private markets have been allowed to play an
increasing role in the North Korean economy, raising productivity and the country’s standard
of living. This has benefited not just the people of North Korea but also the state by providing it
with revenues from taxing market transactions (and, presumably, by providing opportunities for
official corruption), and probably has decreased popular dissatisfaction with the regime as well.
The growth of the private sector has been allowed to accelerate since Kim Jong-un came to power,
but this trend does create potential threats to regime survival. A growing private economy has
made the population of North Korea less dependent on the government and, through trade with
China and other countries, has enabled it to learn more about the outside world, both of which
undermine the government’s control over the population. As a result, the Kim regime continues
to maintain restrictions on the private sector that limit the scope and effects of marketization.
In addition, although potential benefits of foreign investment are recognized, the government
imposes constraints that will have the effect of limiting the amount of external investment, even if
the current economic sanctions on North Korea are lifted.105
103 Dagyum Ji, “Two Koreas in Talks over Fourth Moon-Kim Summit, Blue House Says,” NK News, May 16, 2019, https://www.nknews.org/
2019/05/two-koreas-in-talks-over-fourth-moon-kim-summit-blue-house-says; Dan De Luce and Ken Dilanian, “China Eases Economic
Pressure on North Korea, Undercutting the Trump Admin,” NBC News, https://www.nbcnews.com/news/north-korea/china-eases-economic-
pressure-north-korea-undercutting-trump-admin-n906166; Jeff Schogol, “America Just Cancelled Another Military Exercise with South
Korea,” National Interest, October 19, 2018, https://nationalinterest.org/blog/buzz/america-just-cancelled-another-military-excercise-south-
korea-we-have-all-details-3397; and Tokola, “The Hanoi Summit.”
104 Frazee, “How Far Off Is a Deal?” 2019; Simon Denyer, “North Korea Launches Two Short-Range Missiles, at Same Time as U.S. ICBM Test,”
Washington Post, May 9, 2017, https://www.washingtonpost.com/world/asia_pacific/north-korea-launches-another-projectile-south-korea-
says-the-second-in-a-week/2019/05/09/bb8b8f9c-7234-11e9-8be0-ca575670e91c_story.html; and Dagyum Ji, “North Korean Media Hits
Out against South on Kaesong Industrial Complex, Food Aid,” NK News, May 13, 2019, https://www.nknews.org/2019/05/north-korean-
media-hits-out-against-south-on-kaesong-industrial-complex-food-aid.
105 Andrei Lankov, “The Resurgence of a Market Economy in North Korea,” Carnegie Moscow Center, January 2016, 1–2; Yang, “Wither North
Korea,” 7–8; and Mount and Berger, “Report of the International Study Group,” 13–16.
CHAPTER 3 u CLIFF
61
Taiwan
Taiwan is not a significant regional power. However, because developments in Taiwan have
the potential to trigger a major war, it is nonetheless a key actor in the region. Its potential to
trigger a major war stems from how Beijing might react to political developments on the island.
In elections in 2016, candidates from parties that advocate independence from China took control
of both the presidency and the legislature for the first time in Taiwan’s history, and in elections in
January 2020 they retained control of both branches of government. Beijing’s response so far has
been relatively restrained, but in a speech in January 2019 Xi Jinping asserted that Taiwan should
begin consultations regarding unification with the mainland, repeated a previous statement that
unification is an issue that cannot be postponed indefinitely, and reiterated that China reserves the
right to use force to bring about unification. Having won a resounding victory in the 2020 elections,
Taiwan’s government is unlikely to enter into unification consultations with the mainland. How
Beijing will respond to this development is currently unclear.106
Even if a nominally pro-unification party in Taiwan were to gain power in a future election, the
new government would likely seek to maintain Taiwan’s autonomy from mainland China. This is
because since 1994 no more than 3% of the island’s population has favored immediate unification
with the mainland. As of December 2019, only about 9% of the population wanted Taiwan to
ever unify with the mainland. Instead, 27% of respondents wanted Taiwan to eventually become
independent, while the majority (64%) were either undecided or wanted to maintain Taiwan’s
current ambiguous status indefinitely.107
Thus, for the foreseeable future, Taiwan will seek to maintain its political independence
from the mainland while avoiding provoking a war with China, regardless of the preferences
of its leaders regarding Taiwan’s ultimate relationship with mainland China. For example,
although Tsai has resisted pressure from the mainland to reaffirm the 1992 Consensus (under
which Taiwan’s government at the time accepted that Taiwan and the mainland belonged to a
single China, although Taiwan’s government did not recognize the People’s Republic of China
as the sole legitimate government), she also has not taken any overt steps to formalize Taiwan’s
independence.108 Conversely, her opponent in the 2020 presidential election, Han Kuo-yu,
although representing the nominally pro-unification Kuomintang, stated during the campaign
that if elected he would not sign a peace agreement with Beijing unless it renounced the use of
force against the democratic island and that he did not support the mainland’s “one country, two
systems” unification proposal.109
In addition to maintaining Taiwan’s independence and avoiding conflict with the mainland,
any government of Taiwan will seek to improve the standard of living of the people of Taiwan.
After per capita income had risen by an average of nearly 5% a year in the fifteen years prior to
106 Ng and Chung, “Chinese President Xi Jinping Urges Taiwan”; “Tsai Rejects Deadline over 1992 Consensus,” Straits Times, July 23, 2016,
https://www.straitstimes.com/asia/east-asia/tsai-rejects-deadline-over-1992-consensus; and Kurtenbach and Lai, “Taiwan’s Leader Re-elected
as Voters Back Tough China Stance.”
107 Courtney Donovan Smith, “All Bets Are Off: An Overview of Taiwan’s 2020 Presidential Primaries,” News Lens, May 8, 2019, https://international.
thenewslens.com/feature/taiwan2020/118435; and “Taiwan Independence vs. Unification with the Mainland (1992/06~2019/06),” Election Study
Center, National Chengchi University, https://esc.nccu.edu.tw/course/news.php?Sn=167.
108 Richard C. Bush, “Taiwan’s Local Elections, Explained,” Brookings Institution, December 5, 2018, https://www.brookings.edu/blog/order-
from-chaos/2018/12/05/taiwans-local-elections-explained; “Tsai Rejects Deadline,” Strait Times, 2016; and “‘One China’ Consensus Does
Not Exist, Say 45% of Taiwanese,” Nikkei Asian Review, January 4, 2019, https://asia.nikkei.com/Politics/One-China-consensus-does-not-
exist-say-45-of-Taiwanese.
109 Lawrence Chung, “Taiwan Presidential Hopeful Han Kuo-yu Says ‘No Peace Deal with Beijing until Threats End,’” South China Morning Post,
November 15, 2019, https://www.scmp.com/news/china/politics/article/3037798/taiwan-presidential-hopeful-han-kuo-yu-says-no-peace-deal.

the 2007–8 financial crisis, since the crisis per capita income in Taiwan has grown at an average
annual rate of only 2.4%. Both Tsai and her predecessor, Ma Ying-jeou, have seen their popularity
suffer because of this slow economic growth. Thus, an important imperative for either Tsai or her
successor will be to find ways to stimulate Taiwan’s economy.110
Even as they attempt to fulfill these common overarching goals, Tsai and her successors will be
driven by the forces of domestic politics. Thus, the strategy outlined below may change in coming
years, even if its broad goals remain constant. This strategy includes the following elements:
maintaining good relations with the United States, maintaining moderate defense capabilities,
and reducing dependence on mainland China.111
Maintaining Good Relations with the United States

Arguably the most important element of Taiwan’s national strategy under Tsai and most of her
predecessors has been maintaining the island’s close relationship with the United States. From 1955
until 1979, the United States and Taiwan had a formal defense treaty. This treaty was terminated
after the United States switched formal diplomatic relations from Taiwan to mainland China in
1979, but in the same year the U.S. Congress enacted the Taiwan Relations Act. While less binding
than a treaty, this legislation has generally been interpreted as committing the United States to
defending Taiwan if China were to use force against the island. The firmness of that commitment,
however, depends on the state of U.S. relations with both mainland China and Taiwan. While
Taiwan has little influence on the former, it expends significant effort cultivating relations with the
U.S. administration and Congress and is highly sensitive to U.S. concerns on issues ranging from
trade to defense strategy. Maintaining good relations with the United States will undoubtedly
remain a priority not just for the Tsai government but for future administrations as well.112
Maintaining Moderate Defense Capabilities

Taiwan devoted significant resources to its defense from the time of the termination of its
defense treaty with the United States in 1979 until the early 1990s. Although defense expenditures
as a proportion of the economy fell from more than 7% of GDP in 1979 to 5% in 1993, economic
growth was such that annual defense spending nearly doubled in real terms over this time period.
However, Taiwan’s defense expenditures then entered a period of steady decline in which they
fell by more than 30% (after adjusting for inflation) between 1993 and 2006. Moreover, defense
expenditures have not significantly increased since then. Taiwan in 2018 spent 24% less on defense
than it did in 1993, even as the overall size of its economy more than doubled over that time
period. Although Taiwan’s military has undergone significant improvements in the quality of its
equipment, personnel, and organization since 1993, the reduction in defense spending at the same
110 IMF, World Economic Outlook Database; Lawrence Chung, “Why Is the Popularity of Taiwan’s Tsai Ing-wen Plummeting?” South China
Morning Post, November 27, 2016, https://www.scmp.com/news/china/policies-politics/article/2047906/why-popularity-taiwans-tsai-
ing-wen-plummeting; and Ko Shu-ling, “Taiwan President Tsai Ing-wen Ends Second Year in Office with Strong Economy, but Low Poll
Numbers,” Japan Times, May 20, 2018, https://www.japantimes.co.jp/news/2018/05/20/asia-pacific/politics-diplomacy-asia-pacific/taiwan-
president-tsai-ing-wen-ends-second-year-office-strong-economy-low-poll-numbers/#.XOWjr6R7mUk.
111 “Tsai Ing-wen, Taiwan’s President Is Challenged by a Former Underling,” Economist, March 21, 2019, https://www.economist.com/asia/
2019/03/21/tsai-ing-wen-taiwans-president-is-challenged-by-a-former-underling; and Ko, “Tsai Ing-wen Ends Second Year in Office.”
112 See, for example, Ralph Jennings, “Who’s Behind the Quick Rise in U.S.-Taiwan Relations,” Voice of America, March 27, 2019, https://www.
voanews.com/a/taiwan-us-relations/4849922.html.
CHAPTER 3 u CLIFF
63
time as defense expenditures by its primary threat (mainland China) were increasing by nearly
1,000% is striking (see Figure 1).113
It should be noted, however, that the increase in mainland China’s defense spending has
simply paralleled the growth in the country’s overall economy during this period. Official
Chinese defense expenditures as a percentage of GDP actually fell slightly between 1993 and
2018. It is possible, therefore, that political leaders in Taipei have concluded that China’s massive
economic growth means that there is simply no way that Taiwan could expend the resources
required to maintain military parity with the mainland. Instead, Taiwan’s defense strategy now
appears to be to maintain enough military capability to ensure that China’s use of force against
Taiwan would entail significant costs and risks for Beijing, Taiwan could hold out long enough
that the United States would have time to come to its defense, and that it is at least sufficient
to assure U.S. leaders that Taiwan is serious about its own defense and therefore deserving of
U.S. protection.114
f i g u r e 1 China’s and Taiwan’s annual defense expenditures, 1993–2018
113 SIPRI Military Expenditure Database. For a discussion of improvements in Taiwan’s defense capabilities in recent years, see Bernard D. Cole,
Taiwan’s Security: History and Prospects (New York: Routledge, 2006).
114 For an example of an American critique of Taiwan’s seriousness about its defense, see Wendell Minnick, “How to Save Taiwan from Itself,”
National Interest, March 19, 2019, https://nationalinterest.org/feature/how-save-taiwan-itself-48122.

Reducing Dependence on Mainland China
As noted earlier in this chapter, China’s response to Tsai Ing-wen’s election has included actions
to economically punish Taiwan by means such as limiting the number of mainland tourists
visiting the island. To reduce Beijing’s ability to take advantage of Taiwan’s dependence on the
mainland for coercive purposes, the Tsai administration has been promoting what is called the
New Southbound Policy. This policy aims to increase Taiwan’s economic and social engagement
with the other countries of the Indo-Pacific through a variety of means, including preferential
credit for Taiwanese investment in these countries, economic agreements, and educational and
cultural exchanges. Taiwan has also been pursuing an FTA with the United States and is interested
in joining the CPTPP, an FTA among Pacific Rim countries that does not include China. The
goal of these initiatives is to reduce Taiwan’s vulnerability to coercion by mainland China and to
increase Taiwan’s interdependence with other countries in the Indo-Pacific (as well as the United
States), thereby increasing the potential costs to China of using force or coercion against the
island. This effort has had limited success so far, however. For example, Taiwan continues to be
dependent on China for more than 40% of its export earnings, whereas it receives only 20% from
New Southbound Policy countries.115
The national strategies of these key actors will shape the strategic landscape of the Indo-Pacific
in coming years. China’s economic and military power will continue to grow, albeit more slowly
than in the recent past. Beijing will continue its efforts to acquire control over Taiwan, the South
China Sea, and the Senkaku Islands, but will try to avoid overt conflict and to maintain stability
on the Korean Peninsula. China will also attempt to expand its economic and political influence
more broadly, even as it becomes less open to the outside world.
India’s economic and military power will grow as well, but they will remain considerably less
than China’s. New Delhi will strive to counter China’s growing power but will continue to devote
significant resources and attention to countering the military and terrorist threat from Pakistan.
India will also seek to expand its international influence and prestige, with particular focus on the
Indian Ocean region, and will cooperate with China when doing so helps advance this goal.
Japan’s national security capabilities, and its willingness to use them, will increase gradually.
At the same time, Japan will reinforce its alliance with the United States and expand its security
relations with other Indo-Pacific nations such as India, Australia, and South Korea. Japan will
also try to bolster its economy by increasing its economic integration with the outside world and
strengthening the liberal economic order.
Indonesia, although a potential future power, will focus on promoting economic development
in coming years, but this goal will be hampered by efforts to protect its economic autonomy and
independence. Defense spending will remain limited, and Indonesia will continue its preference
115 Ko, “Tsai Ing-wen Ends Second Year in Office”; “The New Southbound Policy,” CSIS, January 19, 2018, https://www.csis.org/analysis/new-
southbound-policy; Teng Pei-ju, “Taiwan Wants to Sign Free Trade Deal with U.S.: Foreign Minister,” Taiwan News, September 13, 2018,
https://www.taiwannews.com.tw/en/news/3529054; Da-nien Liu, “The Trading Relationship between Taiwan and the United States: Current
Trends and the Outlook for the Future,” Brookings Institution, November 2016, https://www.brookings.edu/opinions/the-trading-relationship-
between-taiwan-and-the-united-states-current-trends-and-the-outlook-for-the-future; and Charles I-hsin Chen, “After Election, Taiwan’s
Grand Strategy Is in Doubt,” National Interest, November 27, 2018, https://nationalinterest.org/feature/after-election-taiwan%E2%80%99s-
grand-strategy-doubt-37277.
CHAPTER 3 u CLIFF
65
for maintaining a low international profile and avoiding alignment with any country or group
of countries.
North Korea will seek to strengthen, and refuse to relinquish, its capability to attack the United
States with nuclear weapons. At the same time, the regime will attempt to weaken and divide the
international pressure on it through various tactics and, if possible, use its acquisition of nuclear
weapons to extract economic concessions from the outside world. Pyongyang will allow limited
expansion of North Korea’s private economy but will not allow the private sector to expand to the
extent that it undermines the ruling regime’s control over the country.
The focus of Taiwan’s national strategy will be on maintaining good relations with the United
States. This will entail avoiding overt moves toward independence while deflecting Beijing’s efforts
to pressure it into unification negotiations. Taiwan will also devote enough resources to defense
to satisfy Washington and to prevent Beijing from believing that China could defeat the island
before the United States could come to its defense. Taiwan will further seek to reduce its economic
dependence on the mainland, although these efforts will at best be partially successful.

chapter 4
Potential Major Events
67
A
U.S. strategy toward the Indo-Pacific should account for the broad trends at work in the
region and the current strategies of key actors, as described in chapters 2 and 3. It must
also allow, however, for an effective response to potential major events that could occur to
interrupt these trends and strategies. This chapter examines the prospects for six types of
events in the Indo-Pacific: interstate war, internal conflict, regime change, financial crises, natural
disasters, and refugee crises. Although the probability of any particular event may be low, at least
some of the potential events identified will almost certainly occur in the coming decade, and many
could have a significant impact on U.S. interests.
Interstate War
Of all potential events in the Indo-Pacific region, a major interstate war would likely have the
greatest impact on U.S. interests. There are a number of ongoing international disputes in the
region with the potential to result in armed conflict. Conversely, peaceful resolution of many of
these disputes would also significantly affect U.S. interests.
Prospects for Interstate War

As noted in chapter 2, the Indo-Pacific has been relatively free from interstate conflict over
the past quarter century. There has only been one significant interstate war in the region in the
last 25 years—the (ongoing) India-Pakistan conflict—and only two other interstate conflicts have
resulted in more than 25 battle-related deaths in a single year.1 There are, however, numerous
other active disputes between countries in the region that could potentially lead to armed conflict.
Table 1 lists the unresolved interstate disputes in the Indo-Pacific region that have resulted in at
least one incident since 2000 in which one or more countries threatened, displayed, or used force
against one or more other countries, as recorded by the Correlates of War Project.2
As can be seen, many of these disputes are over border demarcation, small islands, maritime
boundaries, and other relatively minor issues. Only the India-Pakistan, Korean Peninsula, and
Taiwan disputes are over territories large and populous enough to appear to have the potential
to lead to a major war. Even apparently minor disputes, however, can escalate into significant
conflicts, however: as noted in chapter 3, for example, the 1962 Sino-Indian Border Conflict over
a remote area occupied by fewer than ten thousand people resulted in more than nine thousand
soldiers being killed or wounded.3
Social science research has identified a large number of potential contributors to the likelihood
of interstate conflict. At the global level, empirical evidence suggests that the prevalence of
interstate conflict is most affected by the following factors:
1 For reference, see Uppsala University, Uppsala Conflict Data Program (UCDP), “UCDP Conflict Encyclopedia,” https://ucdp.uu.se/?id=1&id=1.
As noted in chapter 2, the two other interstate conflicts in the region that have resulted in more than 25 battle deaths in a single year since 1993
are the border conflict between Thailand and Cambodia, which resulted in 29 battle deaths in 2011, and the conflict between North and South
Korea, which resulted in 50 battle deaths in 2010. See also Peter Foster and Malcom Moore, “North Korea Condemned by World Powers over
Torpedo Attack,” Telegraph, May 20, 2010.
2 “Militarized Interstate Disputes (v4.3),” Correlates of War Project, http://cow.dss.ucdavis.edu/data-sets/MIDs. Table 1 does not include
the territorial dispute between Singapore and Malaysia over Pedra Branca and nearby islets, which was peacefully resolved in 2008; the
border dispute between China and Russia, which was also resolved in 2008; or the border dispute between India and Bangladesh, which
was resolved in 2015. Table 1 also does not include entries in the database that consisted simply of incursions by the military forces of one
country into the airspace or territorial waters of another or incidents involving fishing boats of one country being discovered in the exclusive
economic zone or territorial waters of another.
3 Li Xiaobing, A History of the Modern Chinese Army (Lexington: University Press of Kentucky, 2007), 202, 351.
CHAPTER 4 u CLIFF
69
• Degree to which the international system is dominated by a single hegemonic power
• Capabilities of international organizations
• Prevalence of consolidated democracies
• Rates of economic growth
• Degree of economic interdependence in the world
• Strength of international norms4
At the regional level, there appears to be an additional “war contagion” factor. Wars appear to
be more likely to occur in regions that are currently experiencing wars, even if there is no direct
ta b l e 1 Active militarized international disputes in the Indo-Pacific
Dispute Parties
Kashmir India, Pakistan
Korean Peninsula North Korea, South Korea
Taiwan China, Taiwan
Kuril Islands/Northern Territories Japan, Russia
China–North Korea border China, North Korea
Senkaku/Diaoyu Islands and
China, Japan, Taiwan
Chunxiao gas field
Dokdo/Takeshima Islands Japan, South Korea
Scarborough Reef China, Philippines
China, Vietnam, Philippines, Malaysia,
Spratly Islands
Brunei, Taiwan
Paracel Islands China, Vietnam, Taiwan
China-India border China, India
China-Bhutan border China, Bhutan
Indonesian separatists operating from
Indonesia, Papua New Guinea
Papua New Guinean territory
Myanmar rebels operating from
Myanmar, Bangladesh
Bangladeshi territory
Myanmar rebels operating from
Myanmar, Thailand
Thai territory
Cambodia-Thailand border Cambodia, Thailand
Indonesia-Malaysia maritime boundary in
Indonesia, Malaysia
the Celebes Sea
Indonesia-China maritime boundary near
Indonesia, China
Natuna Islands
4 Thomas S. Szayna et al., Conflict Trends and Conflict Drivers: An Empirical Assessment of Historical Conflict Patterns and Future Conflict
Projections (Santa Monica: RAND Corporation, 2017), 42–72.

connection between the conflicts.5 With regard to specific pairs of countries, circumstances under
which wars appear to be more likely to occur include when the relative power of the two countries
is at parity or shifting toward parity, or when one member of the pair, but not the other, has an
external alliance. On the other hand, wars between two countries appear to be less likely when
both have advanced economies or are mature democracies.6
A number of characteristics have also been identified as associated with a greater likelihood of
a specific country becoming involved in war. These include the following:
• The country was created or the ruling regime came to power through violence.
• The country is in the process of democratization.
• The country is highly militarized, as evidenced by a high ratio either of military personnel to
total population or of defense expenditures to GDP.
• The country is a major power.
• The country is a major power that is experiencing a power transition.
• The country borders a country that is at war.
• The country has a large number of borders.
• The country has a large number of alliances.7
Applying these findings to the possibility of conflict in the Indo-Pacific in coming years, a
2017 study by the RAND Corporation found that estimates of the capabilities of international
organizations, the prevalence of consolidated democracies, the degree of economic interdependence
in the world, and, to a lesser extent, the strength of international norms all suggest that interstate
conflict will be less frequent in the future.8
This is not to say that interstate conflict will not occur, however, and a number of the disputes in
the Indo-Pacific appear to have the potential to result in armed conflict. As stated above, political
science literature has found that war between a given pair of countries is more likely when the
relative power of the two countries is at parity or shifting toward parity as well as when only one
member of the pair has an external alliance tie. Of the militarized international disputes listed in
Table 1 in which there is not currently a war (i.e., all listed disputes other than the India-Pakistan
dispute), twelve of seventeen involve either pairs of countries whose relative power is at parity or
pairs of countries in which only one member has an external alliance tie.9
5 Daniel S. Geller and J. David Singer, Nations at War: A Scientific Study of International Conflict (Cambridge: Cambridge University Press,
1998), 105–8.
6 Ibid., 68–96.
7 Ibid., 46–67. A power transition is defined as when a country’s power has peaked (i.e., become as great relative to that of the rest of the world
as it is likely to), when its power has bottomed out (i.e., become as weak relative to the rest of the world as it is likely to), when the growth
rate of its power has peaked, or when the rate at which its power is diminishing has peaked. It is unclear whether the finding that countries
with large numbers of borders are more likely to become involved in war is simply the result of the fact that they have more neighbors
with which to potentially go to war, or is because countries with large numbers of borders are for some reason more warlike. Similarly, it is
unclear whether having a large number of alliances makes a country more warlike or whether facing a larger number of threats of war tends
to lead a country to form more alliances in response.
8 Szayna et al., Conflict Trends and Conflict Drivers, 42–85. Not all correlates of interstate conflict are improving. The expected decline in U.S.
preeminence in the future suggests that interstate conflict will be more frequent than it otherwise would be, and estimates of economic
growth rates imply neither an increase nor a decrease in the frequency of conflict.
9 Some of the disputes listed in Table 1 are multilateral. The statement that twelve of the seventeen disputes involve either pairs of countries
whose relative power is at parity or pairs of countries in which only one member has an external alliance tie assumes that, for multilateral
disputes, conflict could occur between any two parties to the dispute. Whether or not the relative power of two countries is at rough parity
was assessed based on whether their defense expenditures in 2018, as recorded in the Stockholm International Peace Research Institute
(SIPRI) Military Expenditure Database, were within a factor of two of each other. Taiwan is considered to have an external alliance tie in the
form of the U.S. defense commitment to Taiwan, and Bhutan is considered to have an external alliance tie due to its relationship with India
(as illustrated by the Doklam standoff between India and China in 2017).
CHAPTER 4 u CLIFF
71
In addition, several of the individual countries involved in the disputes listed in Table 1 have
characteristics that are associated with an increased likelihood of becoming involved in war. In
particular, both North Korea and South Korea can be said to have been formed through violence
(since the territories they occupy are the result of World War II and the Korean War) and both
are relatively highly militarized, with more than 2% of GDP devoted to defense spending
and more than 1% of their populations being active-duty members of their militaries.10 India
and Pakistan are also nations that can be said to have been formed through violence (in the
partition of British India), both have relatively large numbers of borders, and both spend more
than 2% of GDP on defense. In addition, India, with the world’s fourth-largest defense budget
in 2018, is clearly a major power.11 China’s government came to power through violence (the
Communist Party of China’s victory in the civil war in 1949), China has more land borders than
any other country in the world, and it is a major power. China, moreover, is probably currently
experiencing a power transition.12 Finally, Russia is also a major power, has a large number of
borders, and is relatively highly militarized, spending nearly 4% of GDP on defense in 2018.
Russia also has a relatively large number of alliances (with former Soviet republics) and may be
undergoing a power transition.13
Thirteen of the eighteen militarized disputes listed in Table 1 involve at least one of these six
countries. Ten of the militarized international disputes listed in Table 1, moreover, involve either
two of the countries listed above or one of these countries and another country that has an external
alliance tie. These disputes are:
• Kashmir (conflict ongoing)
• Korean Peninsula
• Kuril Islands/Northern Territories
• Taiwan
• Scarborough Reef
• Spratly Islands
• Senkaku/Diaoyu Islands and the Chunxiao gas field
• China-India border
• China–North Korea border
• China-Bhutan border
Based on the identified indicators of the likelihood of interstate war, therefore, the above ten
disputes appear to be the most likely to result in armed conflict (see Figure 1 for a map).
10 International Institute for Strategic Studies (IISS), The Military Balance 2018 (London: IISS, 2018), 274–75, 277–78. Although North Korea’s
defense expenditure and GDP are unknown, given the size of its armed forces, Pyongyang is assumed to spend significantly more than 2%
of GDP on defense.
11 SIPRI Military Expenditure Database.
12 As noted in an earlier footnote, a major power is said to be experiencing a power transition, inter alia, when the growth rate of its power has
peaked. Whether measured in terms of the rate of growth of its GDP or of its defense expenditure relative to the rest of the world, the rate
at which China’s power is growing has probably peaked and is now decreasing (although China’s power relative to the rest of the world will
continue to grow for the foreseeable future).
13 SIPRI Military Expenditure Database. As noted in an earlier footnote, a major power is said to be experiencing a power transition, inter
alia, when it has become as weak as it is likely to become relative to the rest of the world. After falling precipitously after the collapse of the
Warsaw Pact and the breakup of the Soviet Union, Russia’s power relative to the rest of the world appears to have bottomed out and is now
stabilized or even recovering. Russia’s propensity to become involved in war is illustrated by the fact that it has been at war with Ukraine
since 2014.

f i g u r e 1 Most likely locations for interstate conflict in the Indo-Pacific
Southern Kurils/
Northern Territories
China–North Korean border
China-India border
Korean Peninsula
China-Bhutan border
Kashmir
Senkaku/Diaoyu Islands
Taiwan
Scarborough Reef
Spratly Islands
Potential for the Peaceful Resolution of International Disputes

The peaceful resolution of any of the militarized international disputes described in the previous
section would remove them as potential sources of conflict and could eliminate the need for the
countries affected (including the United States) to develop, support, or deploy military forces for
potential contingencies involving these disputes. Peaceful resolution could also be a prelude to,
or an element of, political reconciliation between the disputing parties that allows them to forge
closer economic ties or engage in joint economic development, leading to increased prosperity for
all parties. Thus, the peaceful resolution of militarized disputes in the Indo-Pacific could have a
significant impact on regional and U.S. interests.
In the case of the Korean Peninsula dispute, for example, peaceful resolution could involve a
formal peace agreement providing for the mutual recognition between North and South Korea
and the removal of both sides’ forces from the area of the Demilitarized Zone. Convincing the
CHAPTER 4 u CLIFF
73
world that the threat of inter-Korean war had truly been eliminated would probably also require
the dismantling of North Korea’s ballistic missiles and nuclear, biological, and chemical weapons
and production facilities as well as a significant reduction in the size of North Korea’s armed
forces. Such steps would assure North and South Korea as well as other countries in the region
that neither side had the intention or capability to engage in large-scale conflict with the other.
Although Pyongyang and Seoul have made progress in improving relations recently, the two sides
are still far from achieving a permanent resolution of the inter-Korean dispute.14 Nonetheless,
such a resolution is not inconceivable in the coming decade.
Peaceful resolution of the Korean Peninsula dispute could also entail an agreement about the
future relationship between the two Koreas. Such an arrangement could consist of an agreement
that they will remain separate states for the indefinite future, an agreement on a process for
unification, or something intermediate between those two possibilities.15 The specific nature
of the agreement would have major geopolitical implications for Northeast Asia. Key variables
are whether a single unified state or two separate states would emerge from the agreement and
what the relationship of the resultant state or states would be with China and the United States.
For example, if North Korea were absorbed into the Republic of Korea (ROK), would the ROK
maintain its mutual defense treaty with the United States? Although Korean unification currently
appears improbable, the possibility of such a scenario transpiring in the coming decade cannot be
ruled out.
Peaceful resolution of Taiwan’s status would have major geopolitical significance as well. Like an
agreement about the future relationship between the two Koreas, peaceful resolution of Taiwan’s
status could take the form of an agreement for Taiwan to politically unify with mainland China,
an agreement for Taiwan to formally become an independent nation, or an intermediate solution,
such as an agreement to deliberately leave Taiwan’s status unresolved for a period of time.16
Although it is conceivable that the current government in China could allow a resolution that
is acceptable to the people of Taiwan, prospects for a peaceful resolution would be much greater
if China were to become a democracy, a development that would have geopolitical significance
well beyond the Taiwan dispute.17 As discussed later in this chapter, although such a development
currently appears highly unlikely, the possibility of it occurring at some point in the next decade
cannot be ruled out.
Peaceful resolution of the India-Pakistan dispute over Kashmir would also have a significant
geopolitical impact, removing the primary source of friction between the two countries (although
domestic separatist movements would likely continue so long as India controlled large portions
of Kashmir). This would allow the two countries to redirect some of the strategic attention and
resources that are currently focused on each other. In the case of India, these purposes could
include domestic economic development or the improvement of the capabilities of the armed forces
for contingencies in areas other than the India-Pakistan border regions (e.g., for contingencies
involving China). Although prospects for resolving the Kashmir dispute do not currently appear
14 For example, see Scott A. Snyder, “South Korea’s Leader Makes Bold Effort to Enhance the Prospects for Peace,” Council on Foreign
Relations, September 19, 2018, https://www.cfr.org/article/south-koreas-leader-makes-bold-effort-enhance-prospects-peace.
15 For a discussion of different possible forms of Korean unification, see Bruce W. Bennett, Alternative Paths to Korean Unification (Santa
Monica: RAND Corporation, 2018), 2, 57–72.
16 For a discussion of different ways in which Taiwan’s status might be resolved, see Roger Cliff and David A. Shlapak, U.S.-China Relations
after Resolution of Taiwan’s Status (Santa Monica: RAND Corporation, 2007), 6–11.
17 Ibid., 7–11.

to be promising, it is possible that this could change over the coming decade.18 In this case, the
specific terms of the resolution would have relatively little impact on the strategic landscape in the
region. The important thing would be that the issue had been resolved, eliminating a persistent
source of conflict between India and Pakistan.19
Peaceful resolution of the disputes in the East and South China Seas would be significant for
the United States, given that U.S. treaty allies are involved in all three cases. Resolution of any of
these disputes would therefore eliminate the possibility of the United States becoming involved in
a conflict involving that dispute. The specifics of how these disputes are resolved, however, could
also have significant geostrategic implications. For example, a resolution of the dispute over the
Senkaku/Diaoyu Islands that ceded control to China and allowed it to build military installations
on them would have a different impact on Japanese and U.S. interests from an agreement that
recognized the islands as Japanese territory. In practice, however, any solution to the dispute
acceptable to both China and Japan would likely require a commitment that neither side would
station personnel or build military facilities on the islands.20
A code of conduct is currently being negotiated by most of the parties to the disputes in the
South China Sea (excluding Taiwan). It is thus possible that these territorial disputes (over the
Spratly and Paracel Islands and Scarborough Reef) could be eliminated as a potential cause of
armed conflict in the coming decade. Although any agreement reached in the near term seems
likely to allow the claimants to maintain their presence on any features that they currently occupy,
how other issues that could affect U.S. interests would be decided is unclear. For example, China
has reportedly proposed that parties to the dispute not be allowed to conduct joint military
exercises with outside countries, which would prevent the United States from holding exercises
with countries such as the Philippines (a treaty ally), Vietnam, and Malaysia.21
Resolution of the border dispute between China and India appears unlikely over the next
decade, though this scenario also cannot be completely ruled out. The two countries set up a joint
task force to resolve the issue in 1988, but it has made little progress. If the dispute were resolved,
however, it would remove a potential cause of armed conflict between China and India. The most
18 For further discussion, see A. Heather Coyne, “Building Blocks, Stumbling Blocks: Prospects for Peace in Kashmir,” United States Institute
of Peace, January 1, 2007, https://www.usip.org/publications/2007/01/building-blocks-stumbling-blocks-prospects-peace-kashmir. In 2018
the Pakistani military and government were reportedly seeking to resume peace talks with India. See Maria Abi-Habib, “Pakistan’s Military
Has Quietly Reached Out to India for Talks,” New York Times, September 4, 2018, https://www.nytimes.com/2018/09/04/world/asia/
pakistan-india-talks.html. A terrorist attack on Indian paramilitary police officers in Kashmir by Pakistan-backed extremists in February
2019, however, made it unlikely that India would respond positively to Pakistan’s overtures. For an overview of the incident, see Barkha Dutt,
“Everything Will Change after the Kashmir Attack,” Washington Post, February 16, 2019.
19 It has been argued that control of the glacial waters that flow through Kashmir is a major national security issue for India and Pakistan. For
context, see Shawn Snow, “Analysis: Why Kashmir Matters,” Diplomat, September 19, 2016, https://thediplomat.com/2016/09/analysis-why-
kashmir-matters. However, it seems unlikely that either India or Pakistan would agree to a resolution of the Kashmir dispute that would
allow the other country to pose an existential threat to it.
20 One proposal is that Japan and China share sovereignty over the islands as Spain and France do over Pheasant Island in the Bidasoa River.
Under this proposal, the islands would remain uninhabited (and, presumably, free of military installations) and would have no effect on
the demarcation of China’s and Japan’s exclusive economic zones. For more on this proposal, see Andrei Lungu, “Diaoyu Islands Dispute
Can Be Laid to Rest If China and Japan Accept Joint Sovereignty,” South China Morning Post, October 30, 2018, https://www.scmp.com/
comment/insight-opinion/hong-kong/article/2170613/diaoyu-islands-dispute-can-be-laid-rest-if-china. Other proposed solutions would
not permanently resolve the dispute over sovereignty but seek to eliminate the dispute as a potential source of armed conflict. For further
details, see Kent Wang, “Solving the Senkaku/Diaoyu Dispute,” Diplomat, November 5, 2013, https://thediplomat.com/2013/11/solving-
the-senkakudiaoyu-dispute; Akikazu Hashimoto, Michael O’Hanlon, and Wu Xinbo, “A Framework for Resolving Japan-China Dispute
over Islands,” Los Angeles Times, December 1, 2014, https://www.latimes.com/opinion/op-ed/la-oe-ohanlon-china-japan-senkaku-diaoyu-
islands-20141130-story.html; and Michael O’Hanlon, “A Six Point Plan to Solve the Senkaku Island Dispute,” National Interest, December
29, 2014, https://nationalinterest.org/feature/six-point-plan-solve-the-senkaku-island-dispute-11925.
21 See, for example, Nike Ching, “South China Sea Code of Conduct Gains Momentum as China Moves to Complete Militarization,” Voice of
America, October 22, 2018, https://www.voanews.com/a/south-china-sea-code-of-conduct-gains-momentum-as-china-moves-to-complete-
militarization/4624261.html; and Aaron Rabena, “Can a South China Sea Code of Conduct Help Ensure Regional Stability? Here Are Four
Ways It Could Be Strengthened,” South China Morning Post, January 8, 2019, https://www.scmp.com/comment/insight-opinion/united-
states/article/2180990/can-south-china-sea-code-conduct-help-ensure.
CHAPTER 4 u CLIFF
75
likely option for the dispute to be resolved would be for both sides to drop their claims to territory
held by the other side. Even if the dispute were resolved in a way that favored one side or the other,
the difference would probably be of little strategic significance.22
In 1956, Japan and the Soviet Union agreed that the Soviet Union would return two of the four
disputed Kuril Islands to Japan after the two countries signed a formal peace treaty. The current
Shinzo Abe administration has been pressing Russia to agree to such a treaty so that the islands
can be returned. Although Russia has shown little interest in a treaty, it is certainly conceivable
that such an agreement could be reached in the coming decade, which would eliminate this dispute
as a potential flashpoint for conflict.23
None of the other militarized international disputes in the Indo-Pacific listed in Table 1 appear
likely to be a trigger for a major conflict, and thus their peaceful resolution is unlikely to have
significant implications for U.S. interests.
Internal Conflict
Internal conflicts affect the security and well-being of people living in the involved areas
(as well as the government security forces deployed to fight the insurgents). They also consume
resources and attention from the national government that could be put to more positive uses and,
by discouraging commerce and investment, act as a drag on a country’s economic development,
particularly in the specific locations where the conflict is taking place. In addition, they can result
in the displacement of noncombatants, who may flee to other areas of the country or even to
neighboring countries, thereby disrupting the economies and social order in those areas (see the
section on refugee crises, below).
As noted in chapter 2, the scale of internal conflict in the Indo-Pacific has fallen since 2009.
Nonetheless, there are roughly twenty separate ongoing internal conflicts in the region. A total
of six countries in the region experienced internal conflicts that caused at least one fatality in
2018: India (seven separate conflicts), Myanmar (six conflicts), the Philippines (four conflicts),
Bangladesh (one conflict), Thailand (one conflict), and Indonesia (one conflict). It is possible that
some of these conflicts could worsen, that internal conflicts in the region that have previously
ended could reignite, and that new internal conflicts could emerge.24
Prospects for Internal Conflict

Political science research has identified a number of potential contributors to the likelihood or
intensity of internal conflict in a country. These include the following:
22 For more information, see Mohan Guruswamy, “Why India and China’s Border Disputes Are So Difficult to Resolve,” South China Morning
Post, July 20, 2018, https://www.scmp.com/news/china/diplomacy-defence/article/2124528/why-india-and-chinas-border-disputes-are-so-
difficult.
23 “Joint Declaration by the Union of Soviet Socialist Republics and Japan,” available at http://worldjpn.grips.ac.jp/documents/texts/docs/
19561019.D1E.html; and “Abe Urges Putin to Fulfill ‘Historical Duty’ and Sign Treaty amid Deadlock over Disputed Isles,” Japan Times,
September 5, 2019, https://www.japantimes.co.jp/news/2019/09/05/national/politics-diplomacy/territorial-row-abe-putin-vladivostok/#.
XXfFPWZ7mUl.
24 “UCDP Conflict Encyclopedia.” Nineteen separate internal conflicts caused at least one fatality in 2017, and twenty internal conflicts caused
at least one fatality in 2018. Data for 2019 was not yet available as of this writing. Only conflicts that resulted in 25 or more deaths in at
least one year between 1993 and 2018 are included. Attacks on civilians and communal violence between unorganized groups (e.g., ethnic
riots) are not included. In 2018 all but one of the conflicts was between the government of a country and an insurgent organization in
that country. The one conflict that did not involve a national government was between two insurgent organizations in India: the National
Socialist Council of Nagaland-Isak-Muivah and the National Socialist Council of Nagaland-Unification.

• The existence of great-power rivalry in the international system
• The capabilities of international organizations
• The capacity of governmental institutions
• Whether the country is a consolidated democracy
• Slowdowns in the rate of economic growth
• Resource stress caused by population pressure
• The existence of a youth bulge in the population age structure25
Of these potential contributors to the likelihood of internal conflict, great-power rivalry in

the international system and the capabilities of international organizations are factors that apply
globally. Great-power rivalry was a significant contributor to internal conflicts during the Cold
War. Since then, the number of internal conflicts in the world has fallen, but it is possible that the
rivalry between the United States and China could increase the number of internal conflicts in
coming years. Conversely, the capabilities of international organizations have grown over time,
and this trend appears likely to continue in the future. Thus, it is possible that the increasing
capabilities of international organizations will help limit the number of internal conflicts.26
The other five risk factors for internal conflict listed above are all specific to a given country.
Examining these factors for each of the countries in the Indo-Pacific region suggests that
Bangladesh, Bhutan, Cambodia, Nepal, and Sri Lanka are at the greatest risk of experiencing
internal conflict. All five have relatively ineffective governmental institutions, none is a
consolidated democracy, all are projected to experience a drop of 20% or more in their annual
economic growth rates between 2020 and 2030, all are experiencing significant resource stress,
and all will have youth bulges between 2020 and 2030.27 Consistent with these factors, all of these
countries except Bhutan have had an internal conflict that resulted in 25 or more battle deaths in
a year at some point in the last quarter century, although only Bangladesh still had an internal
conflict that caused fatalities in 2018.28
Political science research also suggests that ethnic or sectarian polarization, while apparently
not affecting the likelihood of internal conflict occurring, can increase the intensity of internal
conflicts when they occur.29 The governments of Bangladesh, Bhutan, Cambodia, and Sri Lanka
25 Szayna et al., Conflict Trends and Conflict Drivers, 46–70.

26 Ibid., 58–61.
27 The effectiveness of a country’s governmental institutions was assessed based on its effectiveness subscore in the Center for Systemic Peace’s
Fragility Index. For more information, see “State Fragility Index and Matrix 2018,” Center for Systemic Peace, INSCR Data Page, http://
www.systemicpeace.org/inscr/SFImatrix2018c.pdf. Szayna et al., Conflict Trends and Conflict Drivers defines a “consolidated democracy”
as one assigned a polity score of 8 or greater (on a scale of -10 to 10) by the Center for Systemic Peace’s Polity Project, which is available
at http://www.systemicpeace.org/polityproject.html. All five of these countries had polity scores of 6 or less, and thus none would be
considered to be a consolidated democracy. Projected annual economic growth rates for 2020 and 2030 are based on estimates by the
International Futures project at the University of Denver, which are available at http://www.ifs.du.edu/ifs/frm_MainMenu.aspx. A country
was considered to be experiencing resource stress if more than 5% of its population was malnourished in 2019. Malnourishment rates are
based on estimates by the International Futures project. A country was considered to experience a youth bulge between 2020 and 2030 if
more than 15% of its population is projected to be between the ages of 15 and 24 in 2025. Percentages of populations between the ages of
15 and 24 are based on the UN Population Division, “World Population Prospects 2019,” https://population.un.org/wpp/DataQuery. The
prospects for internal conflict in the Cook Islands, Kiribati, Maldives, Marshall Islands, Micronesia, Nauru, Niue, Palau, Samoa, Tonga,
Tuvalu, and Vanuatu were not assessed because complete data was not available.
28 “UCDP Conflict Encyclopedia.” Bhutan did experience interethnic violence that caused more than 100,000 people to flee to Nepal between
1992 and 1997. See the section on refugee crises, below.
29 Szayna et al., Conflict Trends and Conflict Drivers, 50.
CHAPTER 4 u CLIFF
77
all discriminate against certain ethnic groups, suggesting that if any internal conflicts involving
those ethnic groups emerge in these countries, they have the potential to be particularly intense.30
In addition to the above five countries, several other countries in the region exhibit at least four
of the five country-specific risk factors for internal conflict listed above. These include Myanmar,
India, Laos, Papua New Guinea, and Vietnam.31 Of them, Myanmar and India were experiencing
internal conflicts in 2018. None of the other three have had significant internal conflicts since
1996, but all appear to have an elevated risk of doing so in the future.32
Four additional countries in the region exhibit three of the five country-specific risk factors for
internal conflict listed above: the Philippines, the Solomon Islands, Thailand, and Timor-Leste.33
Of these, the Philippines and Thailand were experiencing internal conflict in 2018, while the
Solomon Islands suffered from ethnic conflict from 1999 to 2003, suggesting that countries with
even three of the five country-specific indicators are at significant risk of suffering from internal
conflict.34 Table 2 and Figure 2 show the countries identified above as being at relatively high risk
for the emergence of new or renewed conflict. It is, of course, possible that internal conflict will
occur in countries other than those listed in Table 2. In the past 25 years, for example, significant
internal conflict has also occurred in China and Indonesia, neither of which currently exhibits
more than two of the above five indicators for internal conflict.35
Most of the internal conflicts currently ongoing in the Indo-Pacific involve ethnic minorities
seeking greater autonomy or independence. Although such internal conflicts may threaten the
territorial integrity of the countries in which they are occurring, the areas affected generally
represent a relatively small proportion of the country’s total territory and population. Thus, these
separatist conflicts do not appear to be likely to result in the overthrow of the national government.
A few of the ongoing internal conflicts, however, are ideologically based and thus have the
potential to spread geographically and even ultimately result in the overthrow of the national
government. The Philippines, India, and Myanmar, for example, all have Communist insurgencies.
None of these insurgencies currently appears to be a serious threat to overthrow the national
government, however, and it seems unlikely that a new Communist insurgency that would be such
a threat will emerge in the Indo-Pacific in coming years.
A more significant ideological basis for internal conflict in the coming decade could be Islamic
fundamentalism. Bangladesh, in particular, has had numerous violent Islamist organizations. In
2013, more than eight hundred people were killed or seriously injured in Bangladesh as a result
of attacks by Islamist groups. Although most of this violence was directed against civilians, in
2016 individuals and groups claiming affiliation with the Islamic State began directly attacking
government targets. The government of Bangladesh currently appears to be succeeding in
containing the Islamic State, but other militant Islamist organizations continue to operate
30 “Ethnic Power Relations (EPR) Dataset Family 2019,” ETH Zurich, Center for Comparative and International Studies, https://icr.ethz.ch/
data/epr.
31 “State Fragility Index and Matrix 2018”; “Polity Project,”; “International Futures Project”; and UN Population Division, “World Population
Prospects 2019.”
32 An internal conflict is considered “significant” if it is included in the “UCDP Conflict Encyclopedia,” meaning that there were at least 25
battle-related deaths in at least one year since 1989 (when the project was initiated).
33 “State Fragility Index and Matrix 2018”; “Polity Project”; “International Futures Project”; and UN Population Division, “World Population
Prospects 2019.”
34 “UCDP Conflict Encyclopedia”; and Kieren McGovern and Bernard Choulai, “Case Study of Solomon Islands Peace and Conflict-Related
Development Analysis,” UN Development Programme, Human Development Report Office, 2005, http://hdr.undp.org/sites/default/files/
hdr2005_mcgovern_and_choulai_33.pdf.
35 “UCDP Conflict Encyclopedia.”

ta b l e 2 Countries at relatively high risk for new or renewed internal conflict
Greatest risk Elevated risk Moderate risk

Bangladesh India Philippines
Bhutan Laos Solomon Islands
Cambodia Myanmar Thailand
Nepal Papua New Guinea Timor-Leste
Sri Lanka Vietnam –
f i g u r e 2 Countries at the greatest risk for new or renewed internal conflict
Risk level
Highest
Elevated
Moderate
CHAPTER 4 u CLIFF
79
in the country.36 The other four Muslim-majority countries in the Indo-Pacific—Indonesia,
Malaysia, Brunei, and Maldives—have been relatively free of Islamist violence in recent years, and
none of them exhibits more than two of the above five indicators for internal conflict, although
conservative Islamic forces have been strengthening in Indonesia, Malaysia, and Maldives.37
It is also possible that an Islamist separatist movement or insurgency, even if it is not a threat to
overthrow the government of a country in the region, could create an enclave from which terrorist
attacks on the United States or its allies are launched. The government of the Philippines, for
example, is fighting an insurgent group that has declared its allegiance to the Islamic State.
Potential for the Resolution of Internal Conflict

Just as the emergence of new internal conflicts in the region could affect U.S. interests, so too
could the resolution of existing internal conflicts. Two of the countries in the region that are
currently experiencing internal conflicts are U.S. treaty allies (Thailand and the Philippines), and
the United States has a broad interest in peace and stability in the region more generally.
As noted in the previous discussion, twenty internal conflicts that had resulted in 25 or more
deaths in at least one year since 1993 were still ongoing in 2018 (the most recent year for which
complete data is available). Of these, nineteen were insurgencies (that is, conflicts between
the government of a country and an armed opposition organization). The other conflict was
between an insurgent organization and a breakaway faction of that organization. A study of
89 insurgencies in the 20th and 21st centuries by RAND found that the median conflict lasted ten
years and that roughly three-quarters of the insurgencies examined ended after sixteen or fewer
years.38 This suggests that at least some of the four insurgencies in the region that have started
since 2009 and were still underway in 2018 will probably have ended by 2030.39 The RAND study
also found, however, that insurgencies that lasted more than sixteen years were likely to continue
for an extended period of time, with most still underway a decade later. This suggests that most
of the sixteen insurgencies in the region that have been ongoing for more than sixteen years will
still be underway in 2030.40 Table 3 lists all the insurgencies in the region that were active in 2018
and the year in which the conflict began.
36 Siddharthya Roy, “Bangladesh’s New Generation of Militants,” Diplomat, January 29, 2018, https://thediplomat.com/2018/01/bangladeshs-
new-generation-of-militants; National Consortium for the Study of Terrorism and Responses to Terrorism, Global Terrorism Database,
https://www.start.umd.edu/gtd; and Iftekharul Bashar, “Islamic State Ideology Continues to Resonate in Bangladesh,” Middle East Institute,
September 3, 2019, https://www.mei.edu/publications/islamic-state-ideology-continues-resonate-bangladesh.
37 Joshua Kurlantzick, “The Rise of Islamist Groups in Malaysia and Indonesia,” Council on Foreign Relations, Expert Brief, February 27, 2018,
https://www.cfr.org/expert-brief/rise-islamist-groups-malaysia-and-indonesia; Meredith L. Weiss, “Islamism in Malaysia: Politics as Usual?”
Hoover Institution, Caravan, September 27, 2017, 7–9, https://www.hoover.org/research/islamism-malaysia-politics-usual; and “The Other
Contagion,” Economist, March 21, 2020.
38 Ben Connable and Martin C. Libicki, How Insurgencies End (Santa Monica: RAND Corporation, 2010).
39 These are the Myanmar National Democratic Alliance Army (Kokang) insurgency in Myanmar, which started in 2009; the Arakan Army
insurgency in Myanmar, which began in 2015; and the Islamic State insurgencies in Bangladesh and the Philippines, which began in 2016.
As of 2019, both Islamic State insurgencies appeared to be waning, but they had not ended. See Bashar, “Islamic State Ideology Continues
to Resonate in Bangladesh”; and Jim Gomez, “President Duterte Ends Martial Law in Philippines Two Years after ISIS Siege,” Independent,
December 10, 2019, https://www.independent.co.uk/news/world/asia/rodrigo-duterte-martial-law-philippines-end-islamic-state-isis-
mindanao-a9240436.html.
40 Connable and Libicki, How Insurgencies End, 27–29; and “UCDP Conflict Encyclopedia.” Ten additional conflicts in the region were active
at some point in the last ten years, although no incidents were reported for them in 2018.

ta b l e 3 Currently active insurgencies in the Indo-Pacific
Insurgent organization Country Year insurgency began

Communist Party of the
Philippines 1946
Philippines
Karen National Union Myanmar 1948
Kachin Independence
Myanmar 1961
Organisation
Free Papua Movement Indonesia 1965
Communist Party of India
India 1975
(Maoist)
Palaung State Liberation Front Myanmar 1976
Bangsamoro Islamic Freedom

Philippines 1977
Movement
People’s Liberation Army of
India 1978
Manipur
United Liberation Front of
India 1979
Western South East Asia
National Socialist Council of
India 1980
Nagaland-Isak-Muivah
Kashmir insurgents India 1984
National Democratic Front of
India 1986
Boroland
Abu Sayyaf Group Philippines 1991
Restoration Council of Shan
Myanmar 1996
State
South Thailand insurgents Thailand 2003
Myanmar National Democratic
Myanmar 2009
Alliance Army
Arakan Army Myanmar 2015
Islamic State Bangladesh 2016
Islamic State Philippines 2016
note: The Communist Party of India (Maoist) was formed in 2004 through the merger of the Maoist
Communist Centre of India, which was founded in 1975, and the Communist Party of India (Marxist-Leninist)
People’s War, which was founded in 1980. The founding year of the Maoist Communist Centre of India,
therefore, is used as the year in which the Communist Party of India (Maoist) insurgency began. The
Bangsamoro Islamic Freedom Movement broke away from the Moro Islamic Liberation Front in 2010.
The founding year of the Moro Islamic Liberation Front (1977), therefore, is used as the year in which the
Bangsamoro Islamic Freedom Movement insurgency began. The United Liberation Front of Western South
East Asia was formed in 2015 through the merger of the United Liberation Front of Assam (Independent), the
Nationalist Socialist Council of Nagaland Khaplang, the Kamtapur Liberation Organization, and the National
Democratic Front of Bodoland Songbijit. The founding year of the oldest of these organizations, the United
Liberation Front of Assam (1979), therefore, is used as the year in which the United Liberation Front of
Western South East Asia insurgency began.
CHAPTER 4 u CLIFF
81
Regime Change
Regime change refers to a change in a country’s system of government, such as the
replacement of a hereditary monarchy by a democracy or the replacement of a democracy
by a military dictatorship.41 Depending on the country involved, regime change can have a
significant impact on the interests of the United States. The replacement of the hereditary Shah
of Iran by an Islamic theocracy in 1979 and the replacement of the Communist governments by
democracies in Eastern Europe in 1989 are prominent examples.
Research has identified a number of factors associated with regime change, particularly
change from autocracy to democracy or vice versa. One finding is that prosperous democracies
rarely, if ever, revert to autocracy.42 In the Indo-Pacific region, Japan, South Korea, Taiwan,
Australia, and New Zealand, with per capita incomes in purchasing power parity (PPP) of at
least $40,000 in 2018, clearly fall into this category. Malaysia is also a relatively prosperous
democracy, with a per capita income in PPP of more than $30,000 in 2018.43 None of the other
thirteen democracies in the region with populations of at least 500,000 would be described as
prosperous. Among them, the highest per capita income in PPP in 2018 was Sri Lanka’s, which
at $13,400 is less than Thailand’s per capita income was at the time of Thailand’s 2006 and 2014
coups.44 Thus, based on their low levels of economic development, these countries appear to be
at some risk for becoming autocracies.45
Another way of estimating the prospects for regime change in the region’s democracies is the
Center for Systemic Peace’s State Fragility Index. This index reflects the organization’s assessment
of a government’s “capacity to manage conflict, make and implement public policy, and deliver
essential services,” as well as its “systemic resilience in maintaining system coherence, cohesion,
and quality of life, responding effectively to challenges and crises, and sustaining progressive
development.”46 According to this index, Japan, South Korea, Malaysia, Australia, Taiwan, and
New Zealand are the least fragile democracies in the Indo-Pacific.47 These are the same six
countries that would be regarded as being least prone to regime change based on the finding
that prosperous democracies rarely, if ever, revert to autocracy. The remaining democracies in
the region, however, are all assessed to have higher degrees of fragility. Indeed, the Center for
Systemic Peace assesses all of them except for Fiji as being at least as fragile as Thailand was at the
41 Changes from one form of democracy to another form, such as France’s replacement of the Fourth Republic with the Fifth Republic in 1958,
are not considered regime changes here.
42 Barbara Geddes, “What Causes Democratization?” in Oxford Handbook of Political Science, ed. Robert E. Goodin (Oxford: Oxford
University Press, 2011) 320, http://www.oxfordhandbooks.com/view/10.1093/oxfordhb/9780199604456.001.0001/oxfordhb-
9780199604456-e-029. A study published in 1997 found that no democracy with a per capita income of more than $12,250 (in 2018 PPP
dollars) had ever collapsed back into autocracy. For more information, see Adam Przeworksi and Fernando Limongi, “Modernization:
Theory and Facts,” World Politics 49 (1997): 165. However, Thailand was a democracy with a per capita income of $14,650 (in 2018 PPP
dollars) at the time of its 2006 coup and of $18,000 at the time of its 2014 coup. International Monetary Fund (IMF), World Economic
Outlook Database, April 2019, https://www.imf.org/external/pubs/ft/weo/2019/01/weodata/index.aspx. Hungary had a per capita income
of $34,000 in 2019, and some believe that it has now become a dictatorship. See Ishaan Tharoor, “Coronavirus Kills Its First Democracy,”
Washington Post, March 31, 2020, https://www.washingtonpost.com/world/2020/03/31/coronavirus-kills-its-first-democracy.
43 This assessment appears to have been borne out by the May 2018 election in Malaysia, which marked the first time the Barisan Nasional
coalition had been defeated since Malaysia’s independence in 1957, and yet resulted in a peaceful and smooth transfer of power to the
opposition coalition. Shannon Teoh and Trinna Leong, “Mahathir Sworn in as Malaysia’s 7th Prime Minister,” Straits Times, May 11, 2018,
https://www.straitstimes.com/asia/se-asia/mahathir-sworn-in-as-malaysias-7th-prime-minister.
44 As noted in an earlier footnote, Thailand’s per capita income in 2018 PPP dollars was $14,650 in 2006 and $18,000 in 2014, according to the
World Economic Outlook Database.
45 Per capita income estimates are derived from the World Economic Outlook Database.
46 “State Fragility Index and Matrix 2018.”
47 Ibid.

time of its 2014 coup.48 Figure 3 shows the apparent risk of regime change in the democracies of
the Indo-Pacific based on their levels of prosperity and fragility.
If regime change were to occur in one of the democracies of the Indo-Pacific, a variety of forms
of autocracy could replace democracy. These include governments led by individual strongmen,
military juntas, and single-party rule. In addition, as noted in the previous section, conservative
Islamic forces appear to be strengthening in Indonesia. Thus, it is conceivable that if regime change
were to occur, an Islamist autocracy could assume power.49 Finally, regime change could also come
in the form of state failure, whereby a central government loses its ability to exert control over
most of a country’s territory and no other regime takes its place.
f i g u r e 3 Regime change risk of Indo-Pacific democracies
Risk level
Highest
Elevated
Moderate
Low/minimal
48 “State Fragility Index and Matrix 2018”; and “State Fragility Index and Matrix, Time-Series Data, 1995–2018,” INSCR Data Page, Center for
Systemic Peace, http://www.systemicpeace.org/inscr/SFIv2018.xls.
49 Kurlantzick, “The Rise of Islamist Groups.”
CHAPTER 4 u CLIFF
83
Research has identified a number of indicators relevant to the prospects for democratization
in the eight autocracies in the region that have populations of at least 500,000. One finding is
that, with the apparent exception of countries that derive the majority of their income from fossil
fuel extraction, countries with higher per capita incomes are more likely to democratize than
countries with lower per capita incomes.50 Conversely, everything else being equal, autocracies
that have more equal income distribution tend be longer-lived than those that do not. A third
finding is that the greater the proportion of an autocratic country’s neighbors that are democratic,
the greater the likelihood is that the autocracy will transition to democracy. Related to this is a
finding that membership in regional international organizations in which most other members
are democracies also increases the likelihood of democratization. A fifth relevant finding is that
autocracies that are run by professionalized militaries tend to be shorter-lived than other kinds
of autocracies, and that when the military steps down from power, their successors are nearly
always chosen through competitive elections. Autocracies that are ruled by hegemonic parties or
hereditary monarchies, on the other hand, tend to be longer-lived than other types of autocracies.
Political science research has also found, however, that if a hegemonic party is unable to maintain
its monopoly on power, its members prefer that one-party rule be replaced by a democratic
government. Autocracies in which power has been personalized under an individual, by contrast,
are more likely to be replaced by a new dictatorship than by a democracy.51
By these measures, Thailand, Singapore, and China appear to be the strongest candidates to
experience a democratic transition over the next decade. Per capita income in Thailand is projected
to reach about $25,000 in 2016 PPP dollars by 2030, which will make Thailand an upper-middle-
income country.52 It is also a member of the Asia-Pacific Economic Cooperation (APEC), most of
whose members are democracies.53 These indicators suggest that Thailand is relatively likely to
return to some form of democracy in coming years.54
By some measures, Singapore is an even stronger candidate for democratization. It had a per
capita income of over $100,000 in PPP in 2018, one of the highest in the world.55 Singapore’s
two immediate neighbors, Malaysia and Indonesia, are both democracies, and Singapore is also
a member of APEC.56 Singapore is, however, ruled by a hegemonic party, and its government is
assessed to have a low degree of fragility.57
50 Geddes, “What Causes Democratization?” 317, 320, 335. The effect of per capita income on the likelihood of a transition from autocracy
to full democracy appears to be small, but the effect on the likelihood of a transition from autocracy to partial democracy or from partial
democracy to full democracy appears to be greater.
51 Ibid., 321, 323, 328–29, 334–35.
52 John Hawksworth, Hannah Audino, and Rob Clarry, “The Long View: How Will the Global Economic Order Change by 2050?” PwC, 2017,
https://www.pwc.com/gx/en/world-2050/assets/pwc-the-world-in-2050-full-report-feb-2017.pdf; and UN Population Division, “World
Population Prospects 2019.”
53 “Member Economies,” APEC, https://www.apec.org/About-Us/About-APEC/Member-Economies.
54 Precisely what type of autocracy Thailand is currently is unclear. A military junta seized power in 2014. Parliamentary elections were held
in March 2019, and the prime minister elected afterward is nominally a civilian. Yet he was commander in chief of the Royal Thai Army at
the time it overthrew the civilian government in 2014 and retired from the army only after being appointed prime minister later that year.
His re-election as prime minister in 2019 came after a parliamentary election that the military junta was widely viewed as having rigged to
ensure his victory. Meanwhile, Thailand’s king exerts significant influence over politics in Thailand and recently has been asserting greater
control over the army as well. Thus, Thailand has characteristics both of a country run by a professionalized military and of a hereditary
monarchy. See “The Leader of the Thai Junta Tortures the Rules to Remain in Power,” Economist, June 6, 2019, https://www.economist.com/
asia/2019/06/06/the-leader-of-the-thai-junta-tortures-the-rules-to-remain-in-power; and “Relations between Thailand’s Army and King Are
Becoming One-Sided,” Economist, September 4, 2019, https://www.economist.com/asia/2019/09/05/relations-between-thailands-army-and-
king-are-becoming-one-sided.
55 IMF, World Economic Outlook Database.
56 “Member Economies.”

Like Thailand, China is expected to be an upper-middle-income country by 2030, with per
capita incomes projected to reach $26,000. It is also a member of APEC.58 Unlike Thailand,
moreover, China has a high degree of income inequality, with its Gini coefficient being the highest
in the Indo-Pacific.59 On the other hand, China is ruled by a hegemonic party, and its government
is assessed to be only moderately fragile.60 Thus, democratization or another form of regime
change appears to be relatively unlikely for China in coming years.61
Democratization prospects for Bangladesh, Vietnam, Laos, Cambodia, and North Korea appear to
be dimmer than for Thailand, Singapore, and China. All are poor countries with per capita incomes
probably less than $8,000 in PPP in 2018.62 Except in the case of Bangladesh, almost all of their
neighbors are autocracies, and only Bangladesh and Vietnam appear to be members of a regional
international organization whose members are mostly democracies.63 In addition, both Laos and
Vietnam are ruled by hegemonic parties, which tend to be longer-lived than other types of autocratic
regimes.64 The regime in Laos, however, is assessed to be relatively fragile, and thus may be more
likely to fall in the future than Vietnam’s.65 As noted above, moreover, when hegemonic parties are no
longer able to retain their hold on power, they are often replaced by democracies. Thus, if Laos does
experience regime change, it will likely become a democracy.66 In both Bangladesh and Cambodia,
power is personalized under an individual, and both regimes are assessed as being relatively fragile,
suggesting that they may be more likely than the other autocracies in the region to experience regime
change over the next decade.67 Regimes in which power has been personalized under an individual
are most likely to be replaced by another dictatorship rather than by a democracy. Nonetheless,
Bangladesh’s prospects for becoming a democracy are probably somewhat better than Cambodia’s
because both of its immediate neighbors (India and Myanmar) are democracies and because it is a
member of regional international organizations whose members are mostly democracies.
North Korea could be regarded as ruled by a hegemonic party, but in some ways it more closely
resembles a hereditary monarchy. Although nominally led by the Workers’ Party of Korea, in
practice North Korea has been ruled by founding leader Kim Il-sung and his descendants for its
entire history. Both hegemonic party regimes and hereditary monarchies tend to be longer-lived
58 Hawksworth et al., “The Long View”; UN Population Division, “World Population Prospects 2019”; and “Member Economies.”
59 “Measuring Inequality,” World Bank, http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/EXTPA/0,,contentM
DK:20238991~menuPK:492138~pagePK:148956~piPK:216618~theSitePK:430367,00.html; and “GINI Index (World Bank Estimate),”
World Bank, https://data.worldbank.org/indicator/SI.POV.GINI. The World Bank estimated China’s Gini coefficient to be 42.2 (in 2012).
It estimated the Gini coefficients for Laos, Thailand, and Vietnam to be 36.4 (in 2013), 36.0 (in 2015), and 35.3 (in 2016), respectively. Gini
coefficient estimates for Cambodia, North Korea, and Singapore were not available. The country in the region with the lowest estimated Gini
coefficient is Timor-Leste at 28.7 (in 2014), followed by South Korea (31.6 in 2012), and Japan (32.1 in 2008).
61 In addition to democracy and various forms of autocracy, regime change in any of these countries could also result in state failure.
62 IMF, World Economic Outlook Database. Reliable per capita income estimates for North Korea are not available, but satellite observations
suggest that it may be among the poorest countries in the world. For further discussion, see “Satellite Data Shed New Light on North Korea’s
Opaque Economy,” Economist, May 4, 2019.
63 Besides Bangladesh, which borders India and Myanmar, both of which are democracies, the only other country in this group with a
neighbor that is a democracy is Laos, which shares a border with Myanmar, but also with China, Vietnam, and Cambodia, which are not
democracies. Vietnam is a member of APEC, and Bangladesh is a member of the South Asian Association for Regional Cooperation, whose
other members are Afghanistan, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka; the Bay of Bengal Programme, whose other
members are India, Sri Lanka, and Maldives; and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation,
whose other members are India, Thailand, Myanmar, Nepal, Sri Lanka, and Bhutan.
64 Geddes, “What Causes Democratization?” 334.
65 The Center for Systemic Peace assessed Laos as having a fragility index of 12 (on a scale of 0–25, where 25 is most fragile) as of December
31, 2018, comparable to that of Kyrgyzstan or Zambia. Vietnam was assessed as having a fragility index of 7, comparable to that of China or
Mongolia. See “State Fragility Index and Matrix 2018.”
CHAPTER 4 u CLIFF
85
than other types of autocratic regimes, however.68 North Korea is also not a member of any
significant regional international organizations whose members are mostly democracies, and
the fragility of the Kim regime is assessed as being only moderate, comparable to that of China,
Mongolia, or Vietnam.69 Thus, there is little evidence to suggest that regime change, much less
democratization, is imminent in North Korea. As noted in chapter 3, however, if speculation about
North Korean leader Kim Jong-un being in poor health is accurate, it is possible that he could
die at some point in the next decade. If that were to happen, it is possible that it could trigger a
succession crisis that ultimately results in regime change. Figure 4 illustrates the democratization
prospects of the region’s autocracies.
f i g u r e 4 Democratization prospects of Indo-Pacific autocracies
Prospects
Worst
Poor
Moderate


Financial Crises
A financial crisis is a disturbance to financial markets that disrupts their capacity to allocate
capital.70 Such crises are significant because they often trigger recessions, and those recessions
tend to be more severe and last longer than normal business cycle recessions.71
Financial crises may be grouped into four broad categories, although individual crises
may involve more than one category: currency crises, balance-of-payments crises, debt crises,
and banking crises. A currency crisis results from a speculative attack on a country’s currency
that causes a devaluation of the currency or else forces the authorities to defend the exchange
rate by expending large amounts of foreign exchange reserves, by sharply raising interest rates,
or by imposing capital controls. A balance-of-payments crisis is the result of a sudden fall in
international capital inflows to, or a sudden increase in capital outflow from, a country.72
Debt crises can be foreign debt crises or domestic public debt crises. A foreign debt crisis is
when a country, or private entities within the country, stop paying back its foreign debt. A domestic
public debt crisis is when a country stops honoring its domestic fiscal obligations (e.g., government
bonds) by defaulting on them, by deliberate inflation that debases the value of the debt, or by other
means. A banking crisis is when bank failures or bank runs cause banks to stop allowing savers to
withdraw their money or cause the government to intervene on a large scale to prevent this.73
A financial crisis in the Indo-Pacific would be a significant event not only because it might affect
the U.S. economy, but also because it could cause a severe recession that destabilized governments
in the region, leading to revolutions or repression.74 In addition, as noted earlier in this chapter,
countries that undergo a significant slowdown in economic growth are more likely to experience
internal conflict.75
Financial crises are frequent occurrences. One study identified at least 452 instances worldwide
between 1970 and 2011 in which a country experienced a financial crisis, implying that an average
of eleven such crises occurred per year.76 Within the past quarter century, two financial crises have
had a major effect on the Indo-Pacific region in particular: the 1997 Asian financial crisis and the
2007–8 global financial crisis. Unfortunately, financial crises are difficult to predict more than a
year or so in advance.77 Thus, while it is highly possible that another major financial crisis could
strike the Indo-Pacific at some point over the next decade, it is impossible at this time to predict
when it will occur or what countries will be affected.78
70 Barry Eichengreen and Richard Portes, “The Anatomy of Financial Crises,” National Bureau of Economic Research, Working Paper, no.
2126, January 1987, 1–2, https://www.nber.org/papers/w2126.pdf.
71 Stijn Claessens and M. Ayhan Kose, “Financial Crises: Explanations, Types, and Implications,” IMF, Working Paper, 2013, 3–4, 11–12; and
Luc Laeven and Fabian Valencia, “Systemic Banking Crises: A New Database,” IMF, Working Paper, 2008, 28. This chapter does not discuss
normal business cycle recessions because they are a regular feature of the world economy. Although they may make other types of events
more likely (as noted elsewhere in this chapter), they are not by themselves major events unless accompanied by a financial or other type of
crisis. Likewise, the current recession is considered to be one of the consequences of a major event—the Covid-19 pandemic—as opposed to
being a major event itself. Pandemics are considered in the following section on natural disasters.
72 Claessens and Kose, “Financial Crises,” 11–12.
73 Ibid., 12.
75 Systematic statistical analyses have not, however, found a relationship between recessions and the incidence of interstate conflict. See Szayna
et al., Conflict Trends and Conflict Drivers, 52–55, 71; and Geller and Singer, Nations at War, 49.
76 Laeven and Valencia, “Systemic Banking Crises,” 27, 60. Note that this study counted each country separately: if a crisis spread from one
country to other countries, each country that experienced a crisis would be counted as a separate instance.
78 The current economic downturn caused by the Covid-19 pandemic, while significant, has not, as of this writing, resulted in a currency
crisis, balance-of-payments crisis, debt crisis, or banking crisis, and therefore is not a financial crisis.
CHAPTER 4 u CLIFF
87
If a financial crisis does occur, the developing economies of the Indo-Pacific are likely to be
more severely affected than the advanced economies, as this is the typical pattern (although
advanced economies were more severely affected during the 2007–8 global financial crisis). Over
the duration of a crisis, lost economic output typically amounts to about 30% of an average year’s
output, and seven years after the crisis annual output levels are typically about 10% lower than
they would have been if pre-crisis trends had continued. Thus, a financial crisis could significantly
disrupt the economic growth trajectory and potentially precipitate regime change in rising powers
such as China, India, or Indonesia, as well as other vulnerable countries such as Myanmar,
Bangladesh, the Philippines, or Nepal.79
Natural Disasters
The Indo-Pacific region is highly prone to natural disasters, including weather-related disasters
such as typhoons, cyclones, and floods; geophysical disasters such as earthquakes, tsunamis, and
volcanic eruptions; and biological disasters such as severe acute respiratory syndrome (SARS),
avian influenza, and, most recently, coronavirus disease (Covid-19).80 Each year on average more
than 170 million people in the region are affected to some degree by a natural disaster and more
than 30,000 are killed. Natural disasters on average also cause more than $30 billion in economic
damage each year.81
In addition to their immediate human and economic impact, moreover, natural disasters can
have long-term economic, social, cultural, and environmental effects. Businesses, particularly
small businesses that lack disaster insurance or other forms of financial resiliency, may be forced
to shut down permanently, and frequent natural disasters can trap poor households in poverty.
People who were affected by natural disasters in childhood, infancy, or even in utero have worse
health and less educational attainment and wealth when they become adults than those who
were not affected. These effects can propagate across generations, with children born to women
who were exposed in childhood or in utero to natural disasters having lower birth weight and
educational attainment than those born to mothers who were not exposed.82
In addition, although the direct impact of natural disasters tends to be localized, the indirect
effects can propagate more widely. The combination of an earthquake in Japan and flooding in
Thailand in 2011, for example, caused severe shortages at firms in the United States and Europe
that relied on components from the affected areas. The shortages caused these firms to slow or
even stop production of products requiring those components, which in turn resulted in a loss of
orders by those firms to other suppliers located elsewhere in the world.83
Another way in which the effects of disasters can propagate to distant locations is through
migration. In 2017, 11.4 million people were displaced internally because of natural disasters in
East and South Asia. The World Bank has estimated that by 2050 60 million people in South Asia
alone will be internally displaced as a result of climate change. People displaced by disasters often

80 Beh Lih Yi, “FACTBOX-Asia-Pacific: The World’s Most Disaster-Prone Region,” Thomson Reuters Foundation, http://news.trust.org/
item/20171010030737-rqs41.
81 Asian Development Bank (ADB), Asian Development Outlook 2019: Strengthening Disaster Resilience (Manila: ADB, 2019), 61, https://www.
adb.org/sites/default/files/publication/492711/ado2019.pdf.
82 Ibid., 74–81.
83 Ibid., 82–83.

migrate to urban areas, where they are vulnerable to flooding, heat stress, and epidemics. Migrants
can worsen congestion or increase competition for jobs and basic amenities in these urban areas,
resulting in a deterioration of social order as well.84
Natural disasters can also have political effects. Studies have found that more frequent and
more severe disasters increase the likelihood of antigovernment demonstrations and internal
conflict such as riots, insurgencies, and coups. Democracies and weak authoritarian regimes are
particularly vulnerable to such effects. Conversely, natural disasters can sometimes precipitate the
resolution of conflicts. A 2005 peace accord between the Indonesian government and separatists
in Aceh Province was reached after 30 years of conflict as a direct result of the destruction caused
by a tsunami in December 2004.85
Table 4 shows the average annual frequency and impact of natural disasters in the Indo-Pacific
countries that are most prone to such events. Table 5 shows the nineteen disasters in the region
between 1994 and 2019 that caused more than two thousand fatalities, including six that caused
ta b l e 4 Average annual impact of natural disasters in the most-affected Indo-Pacific

countries, 1994–2019
Affected Damages
Country Number Deaths
(thousands) ($ millions)
Australia 5.4 37 232 1,624
Bangladesh 7.4 651 5,876 512
Cambodia 1.5 90 902 54
China 26.8 4,361 102,909 20,004
India 16.1 4,337 48,223 3,485
Indonesia 13.0 7,356 882 1,253
Japan 6.6 931 225 18,801
North Korea 1.7 23,546* 2,061 910
Myanmar 2.0 3,310 257 181
Nepal 3.1 597 430 235
Philippines 14.8 1,052 6,530 878
Sri Lanka 2.8 1,452 730 154
Thailand 4.3 455 3,638 1,958
Vietnam 6.9 460 2,100 836
note Asterisk indicates value includes the famine of 1995–2002, a combined natural and man-made
disaster that killed an estimated 600,000 people.
84 ADB, Asian Development Outlook 2019, 84–87.

85 Zahidul Arefin Choudhury, “Politics of Natural Disaster : How Governments Maintain Legitimacy in the Wake of Major Disasters, 1990–2010”
(PhD diss., University of Iowa, 2013), v, 60–62, 308–12, https://doi.org/10.17077/etd.wau3elgf; Ryan E. Carlin, Gregory J. Love, and Elizabeth
J. Zechmeister, “Natural Disaster and Democratic Legitimacy: The Public Opinion Consequences of Chile’s 2010 Earthquake and Tsunami,”
Political Research Quarterly 67, no. 1 (2014): 3–15; and ADB, Asian Development Outlook 2019, 81–82. There is some evidence that different
types of natural disasters have different types of political effects. Landslides, earthquakes, and volcanic eruptions appear to be more likely to
cause political crises than floods, extreme temperatures, storms, and epidemics. See Choudhury, “Politics of Natural Disaster,” 60–61.
CHAPTER 4 u CLIFF
89
ta b l e 5 Major natural disasters in the Indo-Pacific, 1994–2019
Year Countries affected Type of disaster Fatalities

1995 Japan Earthquake 5,297
1996 China Flood 4,091
1998 China Flood 4,250
1998 India Cyclone 3,471
Earthquake and
1998 Papua New Guinea 2,182
tsunami
1999 India Cyclone 9,748
2001 India, Pakistan Earthquake 20,017
Indonesia, Sri Lanka, India,
2004 Tsunami 200,000+
Thailand
2005 India, Pakistan, Afghanistan Earthquake 74,653
2006 Indonesia Earthquake 6,592
2007 Bangladesh Cyclone 4,275
2008 Myanmar Cyclone 138,366
2008 China Earthquake 87,564
2010 China Earthquake 2,977
Earthquake and
2011 Japan 19,848
tsunami
2013 India Flood 6,453
2013 Philippines Cyclone 7,415
2015 Nepal Earthquake 8,969
Earthquake and
2018 Indonesia 3,989
tsunami
more than ten thousand fatalities. Based on the historical frequency and severity of natural
disasters and the regime types of the countries affected, Thailand, India, Indonesia, and the
Philippines appear to be most vulnerable to internal conflict precipitated by natural disasters.
Indeed, it may not be a coincidence that there are insurgencies ongoing in each of these countries.86
It is not possible at this time to assess the long-term effects of the Covid-19 pandemic in
the Indo-Pacific. As of April 2020, most reported cases and deaths were in Europe and North
America, even when compared to China, the country of origin. Given the lack of widespread
testing capabilities and underdeveloped medical systems in many Indo-Pacific countries,
however, it seems likely that Covid-19 had spread more widely in the region than was initially
recognized, and that many more cases and fatalities would be recorded in coming months. The
long-term human, economic, social, and political effects of this pandemic are impossible to
estimate at this point. 87
86 Center for Research on the Epidemiology of Disasters, International Disaster Database, https://public.emdat.be; and ADB, Asian
Development Outlook 2019, 62.
87 “Mapping the Worldwide Spread of the Coronavirus,” Washington Post, https://www.washingtonpost.com/graphics/2020/world/mapping-
spread-new-coronavirus.

According to the Asian Development Bank, the population and the economic, social, cultural,
and environmental assets that are located within areas of the Indo-Pacific that are most likely to
experience natural disasters are increasing rapidly. This is partly a result of population growth
and economic development, but it is also the result of socioeconomic trends that are concentrating
people and assets in high-risk locations, such as coastal megacities.88 In addition, as noted in
chapter 2, global warming is expected to cause an increase in the frequency of periods of unusually
hot weather and in the frequency and intensity of floods in South and Southeast Asia.89 As a result,
natural disasters may be even more frequent in the Indo-Pacific in the coming decade than they
have been in years past, and the economic damage caused by these disasters is projected to increase
markedly. The number of fatalities caused by natural disasters may gradually decrease over time,
however, as economic development will increase the capacity of countries in the region to respond
to disasters.90
In addition to the direct and indirect effects of natural disasters, as a global leader the United
States is often expected to lead the international response. Each year the Office of U.S. Foreign
Disaster Assistance responds to an average of 65 disasters in more than 50 countries throughout
the world, and the U.S. government spends more than $7 billion each year on overseas disaster
assistance. The U.S. military is often called on to transport personnel and supplies, provide
medical assistance, and help with search-and-rescue efforts.91
Refugee Crises
Traumatic events can cause large numbers of people to flee their homes. This can be a result
of interstate wars, internal conflicts, and natural disasters, but also of communal violence,
persecution, and other circumstances. When such people leave their country of residence and flee
to another country, they are referred to as refugees. If they remain within the borders of their
countries of residence, they are referred to as internally displaced people. In either case, the
displacement of large numbers of people can become a humanitarian emergency that requires
assistance from the international community.92
Large-scale movements of refugees and internally displaced people can have a significant
impact on the countries and localities that they flee to. Refugees compete with local citizens for
basic resources such as land, water, housing, food, and educational and medical services and put
stress on the local energy, transportation, and sanitation infrastructure. International emergency
88 ADB, Asian Development Outlook 2019, 59, 70.

89 Intergovernmental Panel on Climate Change, “Global Warming of 1.5oC,” 189–204. The future impact of global climate change on the
frequency and intensity of other weather-related disasters in the Indo-Pacific, such as droughts or tropical cyclones, is currently unclear.
There does not appear to be any evidence to suggest that the frequency of earthquakes, tsunamis, or volcanic eruptions in the region is likely
to change in the future.
90 ADB, Asian Development Outlook 2019, 61, 71.
91 Office of U.S. Foreign Disaster Assistance, USAID website, May 7, 2019, https://www.usaid.gov/who-we-are/organization/bureaus/bureau-
democracy-conflict-and-humanitarian-assistance/office-us; ForeignAssistance.gov, https://www.foreignassistance.gov; and “Humanitarian
Assistance and Disaster Relief,” Health.mil, https://www.health.mil/Military-Health-Topics/Health-Readiness/Global-Health-Engagement/
Humanitarian-Assistance-and-Disaster-Relief.
92 Internally displaced people are not referred to as refugees because refugees are entitled to aid and special protections under the 1951
Convention Relating to the Status of Refugees, the 1967 Protocol Relating to the Status of Refugees, and other international conventions,
whereas internally displaced people are not entitled to any special protections under international law. The United Nations also does not
recognize people who are fleeing natural disasters or famines to be refugees or internally displaced people. Consequently, Table 6 does not
include events in which large numbers of people were displaced due to natural disasters. For more information, see “What Is a Refugee?”
UN High Commissioner for Refugees (UNHCR), https://www.unrefugees.org/refugee-facts/what-is-a-refugee.
CHAPTER 4 u CLIFF
91
aid can ease some of these pressures, but can also cause price rises for land, housing, building
materials, food, and other commodities, making life more difficult for local citizens. International
aid agencies that hire skilled local staff such as doctors and nurses to serve the refugees can cause
these skills to become less available to the local population. Large population displacements can
also cause environmental problems such as erosion, decreased soil fertility, landslides, groundwater
contamination, and widespread denudation as refugees forage for wood for hut construction,
cooking, and heating.93
If refugees or internally displaced people are from the same ethnic group as the population
of the area into which they have fled, they may be treated with tolerance and sympathy. If not,
however, then friction may arise. Refugees may be seen as worsening crime and social order, or as
receiving treatment and amenities that are not available to the local population. These perceptions
can cause local hostility toward or conflict with the refugees.94
Refugee flows can have significant political effects. They can alter the ethnic composition of
the host country, destabilizing its political balance, and refugees may exert undue influence over
relations between their host country and their country of origin. They may also be seen by the
government of their country of origin or their host country (or both) as supporting terrorists
or ethnic separatists. Such militants may indeed hide amongst refugees, using their settlements
as extraterritorial sanctuaries. This, in turn, can prompt the country from which they have fled
to threaten the host country or even to launch attacks into its territory. Three of the militarized
international disputes listed in Table 1 are of this variety.95
Population displacements in the Indo-Pacific affect U.S. interests. Aside from the possibility of
provoking or exacerbating interstate or intrastate conflict, they can place a heavy burden on the
economies, societies, and governments of U.S. allies and partners in the region. In addition, a large
proportion of Indo-Pacific refugees ultimately end up being resettled in the United States. Between
1993 and 2018, for example, roughly 1.6 million people in the region became refugees. Over the
same time period, nearly 500,000 refugees from the region were admitted to the United States.96
As shown in Table 6, in the past quarter century there have been numerous occasions when
10,000 or more people in the Indo-Pacific have been displaced by conflict, persecution, or other
events, including several that have resulted in the displacement of more than 100,000 people. The
frequency of these displacements has not diminished over the past quarter century. Thus, it seems
likely that large-scale population displacements will continue to occur once every year or so on
average in the Indo-Pacific in the coming decade.
All of the events shown in Table 6 are the result of either separatist conflicts or persecution
of ethnic minorities. This suggests that major population displacements are likely to occur
in the future in countries in which there is a separatist conflict or in which ethnic minorities
are persecuted. India, Indonesia, the Philippines, Thailand, and Myanmar are all already
93 UNHCR Standing Committee, “Social and Economic Impact of Large Refugee Populations on Host Developing Countries,” January 6, 1997,
https://www.unhcr.org/en-us/excom/standcom/3ae68d0e10/social-economic-impact-large-refugee-populations-host-developing-countries.
html. International aid can also be a boon for local citizens, however, by providing increased demand for goods and services that locals
provide and improvements to local facilities and infrastructure. In addition, refugees themselves may bring valuable skills and knowledge,
such as medical training, education, or new agricultural techniques.
94 Ibid.; and Gil Loescher, Refugee Movements and International Society, Adelphi Paper 268 (London: Brasseys, 1992), 41–42, 48–49.
95 Loescher, Refugee Movements and International Society, 41, 46–50.
96 UNHCR, Populations Statistics Database, http://popstats.unhcr.org/en/overview; and U.S. Department of State, Refugee Processing Center,
“Refugee Admissions Report,” March 30, 2020, https://www.wrapsnet.org/admissions-and-arrivals. The refugees who were admitted to the
United States were not necessarily all from the 1.6 million people who became refugees during this time period. There is often a period of
several years between when a person becomes a refugee and when they are admitted to the United States.

ta b l e 6 Major population displacements in the Indo-Pacific, 1993–2018
Time Country of Country of

Number of people Cause
period origination arrival
1992–97 Bhutan Nepal 100,000+ Interethnic conflict in Bhutan
30,000+ (adding to
Persecution of ethnic Chinese in
1993–2018 Vietnam China 280,000 already in
Vietnam
China)
20,000+ (adding to Conflict between Myanmar
1995–97 Myanmar Thailand 80,000 already in government and separatist
Thailand) groups
500,000+ (adding Conflict between Sri Lankan
1998–2001 Sri Lanka Sri Lanka to 200,000 already government and Tamil
displaced) separatists
Indonesia Indonesia East Timorese vote for
1999–2002 250,000
(East Timor) (West Timor) independence
30,000 (adding to Conflict between Myanmar
2000–2006 Myanmar Thailand 100,000 already in government and separatist
Thailand) groups
Conflict between Indonesian
2003–5 Indonesia Malaysia ~20,000 government and separatists in
Aceh
Persecution of Muslim minorities
2003–18 Myanmar Malaysia 90,000+
in Myanmar
Conflict between Myanmar
2003-18 Myanmar India ~20,000 government and separatist
groups
Conflict between Sri Lankan
2006 Sri Lanka India ~20,000 government and Tamil
separatists
180,000 (adding Conflict between Sri Lankan
2006–8 Sri Lanka Sri Lanka to 325,000 already government and Tamil
Conflict between Myanmar
2007–18 Myanmar India ~20,000 government and separatist
groups
200,000 (adding to
2009 Myanmar Bangladesh 30,000 already in Persecution of Muslim minorities
Bangladesh)
50,000 (adding to
2012–13 Myanmar Thailand 80,000 already in Anti-Muslim riots
Thailand)
Persecution of Muslim minorities
2016–17 Myanmar Bangladesh 700,000 (adding to 230,000 already in
Bangladesh)
200,000+ (adding Conflict between Philippine
2017 Philippines Philippines to 90,000 already government and Islamic
s o u r c e : “Population Statistics,” UN High Commissioner for Refugees, 2019, http://popstats.unhcr.org/

en/overview.
n o t e : This table only shows new displacements of people, not populations that are remaining displaced.
CHAPTER 4 u CLIFF
93
experiencing separatist conflicts. Of these countries, Thailand and Myanmar actively discriminate
against certain ethnic groups, according to the International Conflict Research group at ETH
Zurich. In addition, Bangladesh, Bhutan, Cambodia, Laos, and Sri Lanka are all at high or elevated
risk for internal conflict and actively discriminate against certain ethnic groups as well. Thus,
future large-scale population displacements appear to be most likely to occur in these countries.
Figure 5 shows the Indo-Pacific countries with the greatest risk for refugee crises in the future.97
f i g u r e 5 Countries at highest risk for a refugee crisis
Risk level
Highest risk
Elevated risk
Moderate risk
97 “Ethnic Power Relations (EPR) Dataset Family 2019.” Whether a country is at high or elevated risk for internal conflict is assessed earlier in
this chapter.

Over the next decade, a range of major events could occur that would have a significant impact
on U.S. interests. These could include large-scale interstate conflict on the Korean Peninsula or over
Taiwan as well as smaller-scale interstate conflicts over disputed territories such as the Senkaku
Islands, the Spratly Islands, or Scarborough Reef. Conversely, some of these disputes might be
peacefully resolved, which would also affect the policies and actions that the United States needs
to take to promote and defend its interests.
A number of countries in the region could experience new or renewed internal conflicts. None
of the countries that appear to be most likely to experience new internal conflicts is a U.S. treaty
ally, but two U.S. allies—the Philippines and Thailand—are already experiencing internal conflicts
and could be affected by such conflicts in neighboring countries. None of the internal conflicts
currently ongoing appears to be a serious threat to overthrow the national government of a country
in the region, however. Some of the internal conflicts currently ongoing in Indo-Pacific countries
could even be resolved in coming years, which would allow the governments of those countries to
focus more attention and resources on issues beyond their borders.
There is also the possibility of regime change in some of the region’s countries. The United
States’ most important allies in the region—Japan, South Korea, and Australia—are in little
danger of becoming autocracies, but other important partners, such as India, Indonesia, and the
Philippines, are at greater risk. Conversely, there is a chance that some of the region’s autocracies
could become democracies. Prospects for this appear to be best in Thailand, but Singapore and
even China are possibilities as well.
Other major events in the region are also likely, though it is difficult to predict which countries
will be affected. Aside from the recession caused by the current Covid-19 pandemic, another
major financial crisis affecting the region like the 1997 Asian financial crisis or the 2007–8 global
financial crisis is possible in the coming decade. Estimating which specific countries’ economies
will be most affected by the Covid-19 crisis is impossible at this time, but as a rule developing
economies are more likely to be severely affected. This could disrupt the growth trajectories of, or
even precipitate regime change in, countries such as China, India, or Indonesia.
Natural disasters are likely to be more frequent in the Indo-Pacific in the coming decade than
they have been in years past, and the economic damage caused by these disasters is projected to
increase markedly. Aside from the Covid-19 pandemic, the coming decade is likely to see at least
one natural disaster in the region that causes more than 10,000 fatalities. Similarly, large-scale
population displacements, some of them involving more than 100,000 people, will continue to
occur once every year or so in the coming decade. Thailand and Myanmar are the countries
in which such displacements are most likely to occur, but other countries in the region are
possibilities as well.
CHAPTER 4 u CLIFF
95
chapter 5
Resources Available to the United States

for an Indo-Pacific Strategy
97
T
he effectiveness of a strategy for protecting and advancing U.S. interests, given the
challenges and opportunities the United States will face, will depend on the resources that
are available to the country for implementing that strategy. These include tangible assets,
such as the United States’ human capital, economy, technology, and military capabilities,1
but they also include intangible assets such as allies and “soft power.”2 This chapter assesses the
relative strength of the United States in each of these dimensions.
Relative Strength of U.S. Strategic Resources in the Indo-Pacific

The United States possesses significant resources for pursuing its goals in the Indo-Pacific,
but its strengths are not uniform. In some areas the United States is still the world leader, but in
others it is not even the regional leader. This section assesses the strength of U.S. resources for
implementing strategy in comparison with other countries in the Indo-Pacific.
Human Capital
The most important resource of a country is its people. This refers not just to the size of its
population but also to the knowledge and skills its people possess. Throughout the coming decade,
the population of the United States will continue to be dwarfed by the populations of the two Asian
giants, China and India, which are projected to reach 1.46 billion and 1.50 billion, respectively, in
2030. The United States is more populous than any other country in the world, however, and its
population is expected to grow by about 6% between 2020 and 2030, from roughly 330 million
to about 350 million. The projected populations in 2030 of the United States and the seven most
populous Indo-Pacific countries are shown in Figure 1.3
The population of the United States, moreover, is better educated than that of any Indo-Pacific
country. As of 2016, 89% of Americans 25 or older held at least a high school diploma and 33%
held at least a bachelor’s degree. These percentages are higher than those in Japan, South Korea,
and Australia. High education levels in the United States mean that, even though both China
and India have over four times the U.S. population, the United States has more bachelor’s degree
holders among its population age 25 or older (76 million) than India (70 million) and twice as
many as China (36 million). Indeed, even the number of people age 25 or older who hold a high
school diploma in the United States (202 million) is roughly comparable to the numbers in India
(207 million) and China (226 million). Figure 2 shows the number of people age 25 or older who
hold high school diplomas and college degrees in the United States and the eight most-populous
Indo-Pacific countries for which recent data is available.4
1 Many assessments of countries’ national power also include its natural resource endowment. See, for example, Ashley J. Tellis et al.,
Measuring National Power in the Postindustrial Age (Santa Monica: RAND Corporation, 2000), 88–90. It is not clear, however, whether
natural resources are a useful tool for advancing national interests. It has been observed, for example, that the economies of countries
with abundant natural resources tend to grow less rapidly than those of countries that are scarce in natural resources. See Jeffrey D. Sachs
and Andrew M. Warner, “Natural Resource Abundance and Economic Growth,” National Bureau of Economic Research, Working Paper,
December 1995, https://www.nber.org/papers/w5398.
2 Arguably, a country’s most important intangible asset is its institutions—its system of government, legal system, political culture, and so
on—which determine how efficiently it is able to mobilize and apply its other national resources. This report does not attempt to assess the
strengths and weaknesses of U.S. institutions.
3 UN Population Division, “World Population Prospects 2019,” https://population.un.org/wpp.
4 Ibid.; and “Education Statistics: Education Attainment,” World Bank, DataBank. Recent data was not available for Myanmar and Vietnam,
and the most recent educational attainment data for India and China was from 2011 and 2010, respectively. Since education levels in both
countries are rising, the number of people holding high school diplomas and bachelor’s degrees in 2016 was probably somewhat larger than
these estimates, and is likely even larger today.
CHAPTER 5 u CLIFF
99
f i g u r e 1 Projected population of the United States and the largest Indo-Pacific countries,
2030
The combination of a large population and high average education levels gives the United States
arguably the largest pool of human talent in the world. Although China and India have slightly
more people who hold at least a high school diploma, the United States has more people who
have at least a bachelor’s degree than either country, even though their populations are several
times that of the United States. As a percentage of the total population, moreover, education rates
are several times higher in the United States than in China and India. In China only 22% of the
population age 25 or older holds a high school diploma, and in India only 27%, compared to 89%
in the United States. Similarly, only 4% of people age 25 or older in China hold a bachelor’s degree,
and only 9% in India, compared to 33% in the United States.5
Economy
As measured in purchasing power parity (PPP), the United States had the world’s second-
largest economy (after China) in 2019. PwC projected that the U.S. economy will grow at an
average annual rate of 1.7% between 2016 and 2030, while it projected that China’s economy will
grow at an average annual rate of 4.2% over this time period and India’s at a rate of 5.9%. If
these estimates are accurate, although the United States will still have the world’s second-largest
economy in 2030, it will only be about 60% the size of China’s at that point, as compared to 75%
today, and India’s economy, currently about half the size of the U.S. economy, will have reached
5 UN Population Division, “World Population Prospects 2019”; and “Education Statistics: Education Attainment.”

f i g u r e 2 Education levels in the United States and the largest Indo-Pacific countries
about 80% of the size of the U.S. economy. The economies of all other Indo-Pacific countries will
be considerably smaller. Thus, although the U.S. economy is already no longer the largest in the
world, it will certainly continue to be one of the three dominant economies in the region through
2030 (see Figure 3).6
Technology
Quantifying a country’s technological capabilities is difficult, but there are measures that can
at least be used to gain insight into relative national technological power. One is the amount a
country spends on R&D each year. In 2018 the United States led the world in this area, with total
private- and public-sector R&D expenditures of $581 billion. China was a close second, however,
with expenditures of $554 billion (in PPP), and, based on recent trends, it is likely to surpass the
United States in 2020. The third-highest R&D spender in the world in 2018 was Japan—though
its expenditures of $171 billion on R&D were less than a third of those of China—followed by
6 International Monetary Fund (IMF), World Economic Outlook Database, October 2019; and John Hawksworth, Hannah Audino, and Rob
Clarry, “The Long View: How Will the Global Economic Order Change by 2050?” PwC, February 2017. Although China’s economy is now
larger than that of the United States when measured in PPP, the U.S. dollar is still the world’s dominant currency, which conveys significant
advantages to the United States, including lower international transaction costs for U.S. consumers and corporations; lower financing costs
for governments, corporations, and individuals in the United States; a degree of insulation from fluctuations in the global economy; and the
ability to use its dominance of international financial institutions to inflict economic punishment on other countries. See Richard Dzina,
“Assessing the Dollar’s Status as a Reserve Currency in a Multipolar World,” National Bureau of Asian Research, January 2020, https://www.
nbr.org/publication/assessing-the-dollars-status-as-a-reserve-currency-in-a-multipolar-world.
CHAPTER 5 u CLIFF
101
f i g u r e 3 Projected size of the U.S. economy vs. the top Indo-Pacific economies, 2030
Germany and South Korea.7 The five countries that spent the most on R&D in 2018 are shown in
Figure 4.
Another measure of a country’s technological capabilities is the number of researchers it
employs. China had the largest number of researchers of any country in the world in 2017, with the
equivalent of 1.7 million full-time researchers. The United States had the second most researchers,
with 1.4 million, while 680,000 were employed in Japan, 420,000 in Germany, and 410,000 in
Russia (see Figure 5).8
A third way of assessing a country’s technological capabilities is by noting the number of
patents its citizens and companies are granted. More patents were granted to Chinese citizens and
companies than for any other country in the world in 2018. Over 90% of these patents, however,
were granted by China’s own patent office. Because most patent applications are filed domestically
and patent offices in different countries may have different standards for conferring patents, a
better way of comparing the numbers of patents produced by different countries is to consider only
patents granted by patent offices outside the country from which the application is originating.
By this measure the United States led the world in 2018, with nearly 145,000 patents granted by
7 Organisationfor Economic Co-operation and Development (OECD), “Main Science and Technology Indicators,” https://stats.oecd.org/
Index.aspx?DataSetCode=MSTI_PUB. Data for India was not available.
8 Ibid. More recent data for the number of researchers in the United States was not available. Data for India was not available.

f i g u r e 4 R&D expenditures, 2018
foreign patent offices. Japan was a close second with more than 131,000, and Germany was third
with nearly 70,000, followed by South Korea with 43,000 and China with 31,000 (see Figure 6).9
These measures suggest that the United States remains the world leader in technology. It spends
more on R&D than any other country in the world, employs more full-time researchers than any
country other than China, and produces more foreign patents than any other country. Although
China spends nearly as much on R&D as the United States and employs more full-time researchers,
in 2018 this level of effort translated into less than a quarter as many foreign patents as the United
States. The country whose technological capabilities appear to be closest to those of the United
States is Japan. Japan spends only a third as much on R&D as the United States does and employs
only half as many full-time researchers, but from 1997 until 2015 it was actually granted more
foreign patents each year and is still granted nearly as many as the United States.
Defense Spending
Quantifying a country’s military capabilities is also difficult. One crude proxy, however, is
the amount of resources it devotes to its military. The United States spends far more on defense
than any other country, with expenditures in 2018 of approximately $650 billion. The next-biggest
defense spender is China, which spent an estimated $250 billion in 2018 (less than 40% as much
as the United States). Assuming defense expenditures by the United States and the countries of the
Indo-Pacific grow at approximately the same rates as PwC projected for their overall economies,
in 2030 the United States will still be by far the largest defense spender, with annual outlays of
9 World Intellectual Property Organization (WIPO), WIPO Statistics Database, updated October 2019, https://www3.wipo.int/ipstats. Data
for Taiwan was not available.
CHAPTER 5 u CLIFF
103
f i g u r e 5 Number of full-time equivalent researchers, 2017
f i g u r e 6 Patents granted by foreign patent offices, 2018

approximately $790 billion (in 2018 dollars). China’s defense expenditures will have grown to
more than half of the United States’, however, and will be larger than that of all other Indo-Pacific
countries combined (see Figure 7).10
f i g u r e 7 Projected defense expenditures, 2030
Allies
Another key resource possessed by the United States is its network of allies. Within the
Indo-Pacific, the United States has mutual defense treaties with Japan, South Korea, Australia,
New Zealand, Thailand, and the Philippines. These countries had a combined GDP of more than
$11 trillion (in PPP) in 2018, and their combined defense expenditure in 2018 totaled more than
$120 billion.11 Japan and South Korea are also world technological leaders. Their R&D expenditures
ranked third and fifth in the world in 2018, and the two countries were granted the second- and
fourth-highest numbers of foreign patents. Yet, although the United States has highly capable
allies in the Indo-Pacific, its relations with some of them have become strained in recent years.
In the case of South Korea, this is the result of friction over issues such as its relations with North
10 Stockholm International Peace Research Institute (SIPRI), SIPRI Military Expenditure Database; IMF, World Economic Outlook Database;
and Hawksworth, Audino, and Clarry, “The Long View.”
11 SIPRI Military Expenditure Database; and IMF, World Economic Outlook Database.
CHAPTER 5 u CLIFF
105
Korea, China, and Japan and the level of South Korean financial support for U.S. forces deployed
in the country. In the case of Japan, it has primarily been the result of disputes over trade issues,
but negotiations this year over the renewal of Japan’s five-year commitment to provide financial
support for U.S. forces deployed in Japan could be an additional source of friction. In the case
of the Philippines, it is partly the result of friction over the human rights record of the current
Rodrigo Duterte administration.12
In addition to its formal treaty allies, the United States also has strong defense relations with
several other countries in the region, such as Taiwan and Singapore. Moreover, the United States
is a member of the North Atlantic Treaty Organization (NATO), which includes major powers
such as France, Germany, and the United Kingdom. Although the mutual defense portion of the
treaty would only apply in the case of an armed attack in Europe or North America, the existence
of the treaty means that other members of NATO would probably at least provide economic and
diplomatic support in the event that the United States became involved in a military conflict in the
Indo-Pacific.
Soft Power
Soft power is the ability of a country to cause other countries to support its goals without
having to employ material threats or inducements. Soft power results from how a country’s
culture, political values, and foreign policies are viewed by the people of other countries. Attitudes
toward a country’s culture tend to change relatively slowly, but perceptions of its political values
and foreign policies can change more rapidly in response to political developments within the
country and in its policies toward the outside world.13
The United States has relatively strong soft power in the Indo-Pacific. This can be seen from a
2019 Pew Research Center survey of six Indo-Pacific countries, which found that in the median
country surveyed 64% of people had a favorable overall view of the United States, while only 26%
had an unfavorable view. This was better than the median views of the United States in any of the
other four major regions of the world surveyed at the time (Europe, the Middle East, Africa, and
Latin America).14
Although views of the United States are more positive in the Indo-Pacific than in other parts
of the world, other countries are viewed more positively in the region than the United States.
In a 2017 survey of seven Indo-Pacific countries, Japan, India, and South Korea all had higher
median favorability percentages than the United States. Views of the United States, however, were
significantly better than those of Russia, China, and North Korea (see Figure 8).15
12 See Richard Armitage and Victor Cha, “A Foreign Policy Disaster Is Looming in South Korea,” Washington Post, November 23, 2019; David
Maxwell, “U.S.-ROK Relations: An Ironclad Alliance or a Transactional House of Cards?” NBR, November 15, 2019, https://www.nbr.org/
publication/u-s-rok-relations-an-ironclad-alliance-or-a-transactional-house-of-cards; Yuki Tatsumi, “The Tough Road Ahead for U.S.-Japan
Host Nation Support Negotiations,” Diplomat, January 23, 2020, https://thediplomat.com/2020/01/the-tough-road-ahead-for-us-japan-host-
nation-support-negotiations; and Mireya Solís, “U.S.-Japan Relations in the Era of Trump: Navigating the Turbulence of ‘America First,’ ”
México y la Cuenca del Pacífico 8, no. 24 (2019): 9–17.
13 Joseph S. Nye Jr., Soft Power: The Means to Success in the World (New York: PublicAffairs, 2004), 1–32.
14 Richard Wike et al., “Trump Ratings Remain Low around Globe, While Views of U.S. Stay Mostly Favorable,” Pew Research Center, January 8,
2020, 34, https://www.pewresearch.org/global/2020/01/08/trump-ratings-remain-low-around-globe-while-views-of-u-s-stay-mostly-favorable.
15 Pew Research Center, “Spring 2017 Survey Data,” https://www.pewresearch.org/global/datasets. The Indo-Pacific countries in which this
survey was conducted were Australia, India, Indonesia, Japan, the Philippines, South Korea, and Vietnam. Thus, the survey was administered
in three countries that were themselves the subject of questions about favorability in the survey: South Korea, Japan, and India. In all three,
the country that received the highest percentage of favorable ratings was the one in which the survey was conducted. Since the survey is cited
here to assess the soft power of a given country toward other countries, the favorability of the views of people toward their own country is
ignored for this discussion.

f i g u r e 8 Median percentage of survey respondents with favorable views of a country, 2017
There is also considerable variation between Indo-Pacific countries with regard to how
positively the United States is viewed. In Australia and Indonesia, for example, 50% or fewer of
people surveyed in 2019 had favorable opinions of the United States, while in South Korea and the
Philippines more than 75% did.16 Thus, the soft power of the United States in the region depends
very much on which country is being considered.
Conclusion
Although the United States possesses significant resources for pursuing its goals in the
Indo-Pacific, in some areas it is the world leader, while in other areas it is not even the regional
leader. The United States clearly possesses more human capital than any country in the region.
The size of the U.S. population that holds a high school diploma is comparable to that of China and
India, countries with total populations more than four times the population of the United States,
and the United States has more college degree holders than either country. The United States no
longer has the world’s largest economy, however, and it is projected to fall further behind China by
2030. On the other hand, the United States has the world’s strongest technological capabilities and
will maintain this advantage for the foreseeable future. In addition, the United States has by far
16 These differences appear to be stable over time. See Wike et al., “Trump Ratings Remain Low around Globe,” 34, 50–51.
CHAPTER 5 u CLIFF
107
the world’s most capable military, and this will still be true in 2030. Despite all of these strengths,
however, the United States has only moderate levels of soft power in the Indo-Pacific, with people
in the median country viewing Japan, India, and South Korea more favorably than the United
States, although they viewed the United States significantly more favorably than China or Russia.
Perhaps the most valuable resource the United States possesses in the Indo-Pacific is its
allies. Within the region, U.S. treaty allies include the countries ranking third, fifth, sixth, and
eighth in high school diploma holders; the countries projected to have the third-, fifth-, sixth-,
seventh-, and eighth-largest economies in 2030; the countries projected to have the third-, fourth-,
and fifth-largest defense budgets in 2030; the countries that are the first, second, and fifth most
technologically advanced in the region (as measured by foreign patents granted in 2018); and the
countries that appear to have the most and the third most soft power in the region.17
17 UN Population Division, “World Population Prospects 2019”; “Education Statistics: Education Attainment”; IMF, World Economic Outlook
Database; Hawksworth, Audino, and Clarry, “The Long View”; WIPO, WIPO Statistics Database; SIPRI Military Expenditure Database; and
Pew Research Center, “Spring 2017 Survey Data.”

chapter 6
A New U.S. Strategy for the Indo-Pacific
109
T
he Indo-Pacific will present the United States with significant challenges and opportunities
in coming years. However, U.S. leaders have failed to develop a coherent and effective
strategy for the region. As the previous chapter describes, the United States has significant
tangible and intangible resources for responding to those challenges and opportunities.
Such responses will be far more effective, however, if they are informed by a comprehensive strategy
for protecting and advancing U.S. interests in the region.
Principal Features of the Strategic Environment

The analysis in chapters 2, 3, and 4 suggests that the main features of the strategic environment
in the Indo-Pacific over the next decade will be as follows. Once the region has recovered from
the effects of the coronavirus pandemic, the strong economic growth of recent decades will likely
resume and the region will remain largely open to outside trade and investment. Population
growth will be moderate, causing limited stress on resources and governing capacity. China will
remain the dominant economy and dominant military power in the region (other than the United
States), with a GDP greater than the next six largest economies combined and annual military
spending roughly equal to that of all the other countries combined. China will also continue its
efforts to take control over Taiwan, the South China Sea, and the Senkaku Islands. China’s leader
will try to achieve this without military conflict, but will use force if they believe it is necessary.
Meanwhile, Beijing will continue to infiltrate and subvert the political systems of countries in the
Indo-Pacific and elsewhere in the world.
India will have the second-largest economy in the region, and its economic and military power
will grow over the decade. These will remain considerably less than China’s, however, and New
Delhi will continue to devote significant resources and attention to countering the military and
terrorist threats from Pakistan. Another escalation of the conflict between Pakistan and India is
possible and would carry the danger of the use of nuclear weapons. Although willing to cooperate
with the United States and other Indo-Pacific democracies where their interests align, India will
maintain its strategic independence.
Japan will continue to have the third-largest economy in the region, and Tokyo will play a
growing role in regional security and economic affairs. Japan’s economy will grow slowly at best,
however, and its national security capabilities will increase only gradually.
Barring a fundamental shift in its strategic orientation, Indonesia, while a potential regional
power, will not be a major player during the next decade. Its economy will grow at a moderate rate,
but its defense spending will remain limited, and Jakarta will seek to maintain good relations with
all of its neighbors and avoid closely aligning with any group of countries.
North Korea will continue to develop, and not willingly relinquish, its capability to attack the
United States with nuclear weapons. Beijing’s desire to prevent regime change in North Korea,
moreover, will limit the extent to which China is willing to cooperate with the United States and
its allies in exerting pressure on Pyongyang to give up its nuclear capability. Unless regime change
occurs, although Pyongyang may allow modest economic reforms, a large-scale opening up of
North Korea’s economy is unlikely. Regime change does not appear to be imminent, but given
North Korean leader Kim Jong-un’s suspect health, regime change or state failure in North Korea
at some point in the next decade is a possibility.
CHAPTER 6 u CLIFF
111
Taiwan will remain a potential flashpoint, but the government will avoid overt moves toward
independence while also resisting unification negotiations with Beijing. As a result, Taiwan’s
status will likely still be unresolved in 2030. Taiwan will maintain modest self-defense capabilities,
enough to satisfy the United States that it is serious about its own defense and to prevent Beijing
from believing that it could defeat Taiwan before the U.S. military could come to the island’s
defense, but not enough to defend itself for long without U.S. intervention.
Although, as noted already, there are a number of potential flashpoints in the region, the
Indo-Pacific will probably remain relatively free of interstate conflict over the next decade. It is
possible that some of the region’s international disputes could be resolved or at least defused.
Most consequential would be resolution of the inter-Korean, Taiwan, and Kashmir disputes, but
resolution of other militarized international disputes in the region is possible as well.
Insurgencies will continue in India, Myanmar, the Philippines, Thailand, and Indonesia, and
new insurgencies could arise in several countries over the next decade. However, it is also possible
that some current insurgencies will end. In any case, no insurgency in the region is likely to result
in the overthrow of a national government, although these and other internal conflicts (e.g.,
government attacks on civilians or communal violence) will periodically cause large-scale refugee
crises. Terrorism will also remain a problem in the region, killing one thousand or more people
each year, mostly in India, the Philippines, and Thailand.
A number of countries in the region could undergo regime change in the coming decade. The
region’s wealthy democracies, including U.S. defense allies Japan, South Korea, and Australia, are
not at risk, but other democracies appear to be more vulnerable. Myanmar is at greatest risk, but
India and the Philippines have been moving in more authoritarian directions recently as well.
There is also the possibility of an Islamist regime coming to power in Indonesia, Bangladesh,
or Malaysia.
Conversely, some of the autocracies in the region could democratize in coming years. Singapore
and Thailand currently appear to be the most promising candidates. If democratization were
to occur in either China or North Korea, however, it would have a transformative effect on the
strategic landscape of the Indo-Pacific. In the case of North Korea, even the replacement of the
Kim dynasty by another authoritarian government could result in a government more willing to
consider giving up North Korea’s nuclear weapons or that would at least behave less aggressively
toward its neighbors.
Other major events will undoubtedly happen in the region. The long-term effects of the
current Covid-19 pandemic are still unclear, and other natural disasters will occur. In particular,
unusually hot weather and floods will become more frequent as a result of global climate
change. Even if the world and regional economy recover quickly from the recession caused
by the pandemic, another financial crisis, like the 1997 Asian financial crisis or the 2007–8
global financial crisis, is possible. Meanwhile, the Indo-Pacific will remain a major source of
environmental pollution and greenhouse gas emissions.
An Indo-Pacific Strategy of Democracy Strengthening

The strategic environment described in the preceding section will present the United States
with both challenges and opportunities over the next decade. The greatest challenge will be the
efforts of the dominant economic and military power in the region, China, to take control of

Taiwan, the South China Sea, the Senkaku Islands, and possibly other territories, particularly
since the United States has security commitments to many of the countries affected by these
efforts. Another major challenge will be North Korea’s actions to acquire and retain the capability
to attack the United States with nuclear weapons. In addition, a number of other events could
occur that would be detrimental to U.S. interests. One example would be if a major democracy
in the region, such as India or Indonesia, were to become an autocracy. Another would be if an
Islamist regime were to come to power in one of the region’s majority-Muslim countries, such
as Indonesia, Bangladesh, or Malaysia. Other possibilities include an escalation of the India-
Pakistan conflict, significant new internal conflicts in the region, or a major financial crisis.
Meanwhile, existing challenges will continue. Nearly twenty insurgencies are currently ongoing,
large-scale refugee crises will periodically occur, terrorism will remain a problem, major natural
disasters will continue to occur regularly and will likely increase in frequency, and the Indo-
Pacific will continue to be a major source of pollution.
At the same time, the Indo-Pacific will also present the United States with a number of
opportunities in the coming decade. As a democracy and regional rival to China, India shares
many interests with the United States. Its economy and defense budget are second in size in the
region only to China’s, and its economic and military power are steadily increasing. Japan, another
regional power and a U.S. treaty ally, is seeking to play a greater role in security and economic
affairs. Once the region has recovered from the effects of the Covid-19 pandemic, its strong
economic growth of recent decades will likely resume, and it will continue to be largely open to
outside trade and investment. Interstate conflict will remain rare in the Indo-Pacific, and some
of the region’s international disputes and internal conflicts could be resolved in coming years,
which would further contribute to stability and economic growth. Finally, it is possible that some
of the region’s autocracies, including China and North Korea, could become democracies or at
least become more benign autocracies.
To protect and advance the interests identified in chapter 1 in the face of these challenges and
opportunities, a U.S. strategy for the Indo-Pacific region should seek to achieve the following:
• Prevent China from taking over Taiwan, the South China Sea, or the Senkaku Islands
• Counter China’s actions to subvert the political systems of other countries
• Convince North Korea to relinquish its nuclear weapons
• Be prepared for the possibility of regime collapse in North Korea
• Strengthen democracy in countries where it is fragile
• Encourage autocracies to evolve into democracies
• Help resolve or neutralize international disputes in the region
• Help countries in the region bring an end to their insurgencies and prevent the emergence of
new ones
• Help countries in the region reduce the severity of terrorist attacks
• Help prevent and respond to refugee crises
• Help respond to natural disasters
• Be prepared to respond to a financial crisis
• Take advantage of the region’s economic growth
• Help countries in the region reduce environmental pollution and greenhouse gases
CHAPTER 6 u CLIFF
113
Fortunately, the United States possesses significant resources for accomplishing these tasks. It
has the most human capital of any country in the region, the world’s most advanced technological
capabilities, the world’s most powerful military, and multiple highly capable allies, both in the
region and elsewhere in the world.
There are numerous ways in which the United States could accomplish the objectives listed
above. Given the magnitude and number of challenges, however, particularly those presented by
China, along with the certainty that developments elsewhere in the world will continue to require
U.S. attention and resources, the United States is simply not capable of managing them alone. The
only way the United States can hope to protect and advance its interests in the Indo-Pacific in the
coming decade will be as part of a coalition of countries with shared goals and values. As noted in
chapter 1, a world in which more countries are democracies is in the interest of the United States.
In addition, the most significant challenges and opportunities in the region are also challenges
and opportunities for the other democracies. As a result, the region’s democracies are the natural
allies of the United States. The strategy recommended here, therefore, focuses on strengthening
U.S. relations with the democracies of the region and making those democracies stronger and
more secure. The latter entails facilitating their economic growth, strengthening their defense
capabilities, and helping end internal conflicts that sap their strength. It also entails strengthening
democratic institutions within these countries, reducing the external threats to them, and
increasing the capabilities of the United States to come to their defense if needed.
Although the focus of this strategy is on democracies, it does not ignore the other countries of
the region. In particular, it includes promoting democratization and human rights in countries
that are not yet democracies. In addition, there are many issues on which the United States should
cooperate with other countries regardless of their type of government. These include responding
to natural disasters, humanitarian crises, and economic crises and working to reduce pollution
and greenhouse gas emissions. The democracy strengthening strategy comprises the following
main elements.
Strengthening relations with the democracies. Accomplishing many of the tasks identified above
will require the cooperation of countries that share U.S. goals and values. A strategy of democracy
strengthening, therefore, should begin with repairing and reinforcing U.S. relationships with the
democracies of the region. This includes making clear that the United States views its relationships
with these countries not as a set of bilateral transactions, but rather as based on a shared interest
in each other’s security, freedom, and prosperity. This is particularly true with regard to the
United States’ three major allies in the region, Japan, South Korea, and Australia, all of which are
democracies. The United States should reaffirm its relationships with these countries as being equal
partnerships in which the partners jointly develop and implement responses to the challenges and
opportunities they face. Strengthening relations with the democracies of the Indo-Pacific means
that the United States should also seek opportunities to take concrete actions that will benefit the
region’s democracies. Indeed, many of the other elements of this strategy, described below, will
advance both goals.
Promoting the economic growth of democracies. The stronger the democracies of the Indo-Pacific
are, the better they will be able to support the United States in accomplishing its goals. The
United States can strengthen these democracies by facilitating their economic growth. One
means for accomplishing this is free trade and investment agreements. Reduced barriers to trade
and investment will result in greater economic growth in the participating countries, including

the United States. Ideally, the United States would join together with the other Indo-Pacific
democracies in a single multilateral arrangement like the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP), which includes provisions not only for trade
and investment but also for intellectual property protection, environmental protection, labor
standards, and human rights. However, several member countries are not currently democracies.
If the United States joins the CPTPP, therefore, it should seek to recruit other democracies to
join and discourage additional nondemocracies from joining. Alternatively, it could seek to
create a new multilateral trade and investment arrangement for which democracy is a condition
for membership.1 In either case, democratic countries will disproportionately benefit from
membership, and nondemocratic countries will have an incentive to adjust their political systems
to improve their accession prospects. For democracies that are unwilling to join a multilateral
arrangement, the United States should seek bilateral trade and investment agreements and
encourage those countries to reach such agreements with other democracies as well.
In the case of economically developing democracies, another way the United States can
facilitate their economic growth is to provide development assistance. In 2019, U.S. economic
development assistance to the developing democracies of the Indo-Pacific, which represented
more than a quarter of the world’s total population, amounted to $117 million, less than 4% of
total U.S. development assistance that year.2 Thus, there is clearly scope for a significant increase in
U.S. development assistance to the region.
Strengthening the defense capabilities of democracies. A nation’s defense capabilities are
primarily a function of its own determination and commitment to ensuring that it has the
means to adequately defend itself. The United States can increase the effectiveness of such efforts,
however, by making advanced defense systems and technologies available to the other democracies
of the Indo-Pacific. Conversely, some Indo-Pacific democracies have significant technological and
manufacturing capabilities of their own. The United States can help provide the economies of scale
needed to exploit those capabilities by engaging in co-development or co-production of defense
systems with these countries or by purchasing systems that they have already developed. Such
arrangements will also benefit the United States by enabling it to take advantage of technologies
and capabilities that do not exist domestically without having to invest the resources needed to
develop them.
Another way in which the United States can contribute to increasing the defense capabilities
of other Indo-Pacific democracies is through joint training, exercises, and other exchanges. Such
mechanisms not only enable participating countries to share experiences and best practices; they
also provide opportunities to rehearse the types of coordination and cooperation that would be
required for coalition operations during an actual contingency. Moreover, given that contingency
operations could well involve several countries simultaneously, the United States should seek to
increase the frequency of events that include multiple potential coalition partners, as compared to
purely bilateral exchanges.
1 For example, membership in the European Union is limited to those countries that have “stability of institutions guaranteeing democracy,
the rule of law, human rights and respect for and protection of minorities.” See “Accession Criteria,” European Commission, https://
ec.europa.eu/neighbourhood-enlargement/policy/glossary/terms/accession-criteria_en.
2 SeeForeignAssistance.gov, https://www.foreignassistance.gov; and UN Population Division, “World Population Prospects 2019,” https://
population.un.org/wpp . Only funds actually spent are considered. Another 11% of U.S. development assistance went to programs
and organizations that operate worldwide. Presumably some of those monies were spent in the Indo-Pacific, but at least 85% of U.S.
development assistance went to other regions.
CHAPTER 6 u CLIFF
115
Helping end internal conflicts in democracies. Internal conflict weakens democracies by
discouraging economic development in the affected areas and by forcing governments to divert
resources and attention from other purposes.3 India, Myanmar, the Philippines, and Indonesia all
have ongoing insurgencies, and other Indo-Pacific democracies are susceptible to such conflict as
well. The United States should seek to help end the conflicts in India, Myanmar, the Philippines,
and Indonesia by facilitating dialogue, brokering peace agreements, and promoting reconciliation
where possible. At the same time, the United States can also advise and assist government forces
in defeating terrorist and other extremist organizations that are operating within democracies.
Such assistance should be conditioned, however, on the governments of these countries not using
terrorist or extremist threats as a pretext for restricting civil liberties or repressing subpopulations
that are simply demanding greater rights or autonomy.
Helping strengthen democracy in Indo-Pacific countries. Given that many of the democracies
of the Indo-Pacific are relatively new or fragile, the United States should also contribute to the
strengthening of democracy within those countries by promoting the rule of law, human rights,
free and independent media, political accountability and transparency, democratic political
processes and institutions, civic education, political competition and consensus building,
democratic conflict resolution, and civil society organizations. As noted in chapter 4, consolidated
democracies are less likely to experience internal conflict. U.S. efforts to strengthen democracy
in Indo-Pacific countries, therefore, will have the additional benefit of reducing the likelihood of
new internal conflicts emerging within them and may also contribute to the resolution of existing
internal conflicts.
Strengthening democracy should also include measures to help Indo-Pacific democracies
resist forces that seek to undermine democracy, such as Chinese efforts to infiltrate and subvert
their political systems or the spread of extremist ideologies. Such measures could include sharing
intelligence about Chinese influence activities and advising on best practices for detecting,
thwarting, and counteracting China’s operations. It could also include support for independent
media outlets in these countries as well as expanded Voice of America and Radio Free Asia
programming. Measures to counter the spread of extremist ideologies could include support for
programs that promote religious tolerance and for strengthening nonideological education in
these countries.
Reducing external military threats to democracies. In addition to making the democracies of the
Indo-Pacific stronger, the United States should seek to reduce external military threats to them.
One way the United States can accomplish this is to facilitate fair and equitable resolutions to
the militarized disputes that these democracies have with other countries. Another way is to seek
to eliminate categories of weapons that are particularly dangerous. Eliminating North Korea’s
nuclear, biological, and chemical weapons, for example, would not only reduce Pyongyang’s ability
to attack or coerce Indo-Pacific democracies or the United States; it would also reduce the dangers
that such weapons would pose in the event of a collapse of governance or a civil war in North
Korea. The United States can also seek to limit the ability of nations that threaten Indo-Pacific
democracies, such as North Korea and China, to acquire the equipment or technology that enables
them to do so. In the case of North Korea, this primarily refers to equipment and technology
relevant to the development and production of ballistic missiles and nuclear, biological, and
3 See,for example, Walter C. Ladwig III and Anit Mukherjee, “The United States, India, and the Future of the Indo-Pacific Strategy,” National
Bureau of Asian Research (NBR), June 20, 2019.

chemical weapons. In the case of China, it would primarily refer to equipment and technology
relevant to the development and production of advanced conventional weapons.
Strengthening the capabilities of the United States to defend democracies. At the same time as
it seeks to reduce external threats to the democracies of the Indo-Pacific, the United States needs
to ensure that it has the capability to help them defend themselves against aggression or coercion.
This is, of course, particularly true of those democracies to which the United States has security
commitments. For example, it needs the capability to help defend South Korea and Japan from
North Korean conventional, nuclear, biological, and chemical attacks; to help defend Taiwan
against Chinese attack or invasion; to help Japan defend the Senkaku Islands against Chinese
efforts to seize control of them (including through the use of gray-zone methods); and to help the
Philippines defend the Philippine-held Spratly Islands against Chinese efforts to seize control of
them. Moreover, even where the United States does not have an explicit security commitment to
a democracy in the region, it should maintain the capability to come to the aid of that country if
threatened by an authoritarian country.
Promoting democracy and human rights in nondemocratic countries. Although the focus of this
strategy is on strengthening the democracies of the Indo-Pacific, the United States should also
promote democratization and human rights in nondemocratic countries. The ability of the United
States to bring about fundamental improvements in human rights, much less actual democracy,
in countries such as China and North Korea may be limited in the short run. Nonetheless, U.S.
pressure can still positively benefit the lives of people in these countries.4 In addition, if democracy
eventually does come to these countries, long-standing U.S. support for democratic conditions
within them will likely result in better relations with the United States and greater subsequent
openness to U.S. initiatives to support and strengthen democracy. U.S. efforts to promote
democracy in the nondemocracies, moreover, will have the benefit of increasing U.S. soft power
with the other countries in the region.5
Cooperating with nondemocracies where there are shared interests. A strategy of democracy
strengthening does not preclude cooperation with the nondemocracies of the region. Where in its
interests, the United States should continue to cooperate with nondemocracies such as Thailand
(a treaty ally), Singapore, and China on issues such as terrorism and piracy, crime, environmental
protection, humanitarian crises, and disaster response, including combating pandemic disease.
The United States can use interactions such as educational and cultural exchanges, moreover, as
opportunities to encourage these countries to improve their human rights records, allow greater
social and political freedom, and take steps toward democracy.6
Continuing to provide disaster relief services and humanitarian assistance. The United States
should also continue to provide disaster relief services and humanitarian assistance to all
Indo-Pacific countries that are willing to accept such aid. Doing so increases U.S. soft power with
all the countries of the region, not just those directly affected. Moreover, it forces authoritarian
governments to choose between allowing U.S. and other foreign relief organizations into their
countries—undercutting the narratives that these governments propagate about the malign
intentions of the United States and its allies—and managing the aftermath by themselves.
4 Roberta Cohen, “A Serious Human Rights Negotiation with North Korea,” 38 North, February 1, 2017.
5 Joseph Nye, Soft Power: The Means to Success in World Politics (New York: PublicAffairs, 2005), 62.
6 Ibid., 44–55; and Joshua Muravchik, Exporting Democracy: Fulfilling America’s Destiny, rev. ed. (Washington, D.C.: AEI Press, 1992), 189–203.
CHAPTER 6 u CLIFF
117
Providing economic assistance in crises. The hands-off U.S. approach to the Asian financial
crisis of 1997 significantly damaged U.S. soft power in the region and allowed China to increase
its own soft power by providing financial support for some countries. With $3 trillion in foreign
exchange reserves today, more than twenty times what it had in 1997, China is in a much stronger
position to supply financial assistance to countries in the region.7 Although as of April 2020 the
aid China had sent to other countries in response to the coronavirus pandemic was mainly of
symbolic value, if China’s economy recovers quickly from its shutdown in early 2020 it could
begin offering more substantial assistance. Meanwhile, far from assisting other countries, the
United States was competing with them in its effort to acquire personal protective equipment and
other scarce medical supplies.8 This could further damage U.S. soft power in the region. Given the
importance of the Indo-Pacific to the U.S. economy, stabilizing regional economies, moreover, is
also in the economic self-interest of the United States.9
Working with all Indo-Pacific nations to reduce pollution and greenhouse gas emissions.
Democracies are generally more responsive to citizen concerns about pollution and environmental
degradation than autocracies, which tend to focus on overall economic growth rates while
neglecting quality-of-life issues. The spread of democracy in the Indo-Pacific, therefore, should
contribute to improvements in the environment. Pollution and climate change, however, do not
remain confined within national borders, and the Indo-Pacific is a major source of air and water
pollution as well as greenhouse gas emissions affecting the entire world. Thus, the United States
should work with both democracies and autocracies in the region to address these issues. In the
case of developing democracies, U.S. efforts could include subsidizing the transfer of technologies
that can help reduce emissions.
Recommendations for Implementing the Strategy

Detailed below are specific recommendations for translating the strategy described in the
preceding section into concrete actions and policies. They are intended to be substantial enough
that, if implemented, they would collectively represent a significant operationalization of the
strategy. Precisely how these initiatives should be carried out will depend on specific circumstances,
however, and the list is not intended to be exhaustive. Numerous additional actions and policies
for advancing the strategy are no doubt possible.
Join the CPTPP and expand it to include other democracies. Although the United States
withdrew from the Trans-Pacific Partnership (TPP) in 2017, the remaining eleven countries
then reached a similar agreement, the CPTPP, that entered into force at the end of 2018. While
the CPTPP lacks certain provisions that the United States had pushed to include in the TPP, the
United States should nonetheless join the CPTPP and seek to expand it by incorporating other
7 “China Foreign Exchange Reserves,” Trading Economics, https://tradingeconomics.com/china/foreign-exchange-reserves; and “Yearly Data
1999,” National Bureau of Statistics of China, http://www.stats.gov.cn/english/statisticaldata/yearlydata/YB1999e/index1.htm.
8 See “Thanking Big Brother,” Economist, April 18, 2020, 29–31.
9 Providing liquidity to Asian financial markets in a crisis will also contribute to maintaining the U.S. dollar’s position as the predominant
international currency. See Richard Dzina, “Assessing the Dollar’s Status as a Reserve Currency in a Multipolar World,” NBR, January 6, 2020.

Indo-Pacific democracies, particularly Indonesia, South Korea, and Taiwan.10 The lowered barriers
to trade and investment between members will contribute to the economic growth and prosperity
of member countries, most of which are democracies. Indeed, although the CPTPP currently
includes three countries that are not democracies (Vietnam, Singapore, and Brunei), the United
States and other democratic members could seek to limit future membership to countries that are
democracies. Doing so would provide nondemocratic prospective members in the Indo-Pacific
with an incentive to become democracies as well.11
Reach free trade agreements (FTAs) with non-CPTPP democracies. If the United States joins the
CPTPP, but other Indo-Pacific democracies continue to remain outside the arrangement, then it
should seek to reach bilateral FTAs with them, particularly with India, Indonesia, Taiwan, and the
Philippines. (These countries are the four largest democratic Indo-Pacific economies that are not
members of the CPTPP and with which the United States does not already have bilateral FTAs.)
If, for some reason, the United States does not join the CPTPP, then it should seek to reach a
bilateral FTA with Malaysia (which is a member of the CPTPP) as well. Joining the CPTPP would
be significantly preferable to a series of bilateral agreements, however.12
Complete bilateral investment treaties with Indo-Pacific democracies. The CPTPP contains
both trade and investment provisions. If the United States joins the CPTPP, therefore, it will
automatically also have investment agreements with the other members. In addition, however,
the United States should also seek to reach bilateral investment treaties with Indo-Pacific
democracies that are not part of the CPTPP, particularly, again, with India, Indonesia, Taiwan,
and the Philippines. If the United States does not join the CPTPP, then it will want to seek bilateral
investment treaties with Japan, South Korea, Australia, and Malaysia as well.13
Increase foreign aid to developing democracies of the Indo-Pacific. The strategy outlined in
the previous section includes facilitating the economic growth of Indo-Pacific democracies,
strengthening their defense capabilities, helping these countries resolve internal conflicts,
strengthening democracy within them, reducing external threats to them, providing humanitarian
assistance, and working with them to reduce pollution and greenhouse gas emissions. There are
10 When the United States withdrew from the TPP, the remaining members suspended certain provisions that Washington had pushed for but
which were opposed by most other participants. These provisions could potentially be reinstated, however, if the United States were to rejoin
the organization. See James McBride and Andrew Chatzky, “What Is the Trans-Pacific Partnership (TPP)?” Council on Foreign Relations
(CFR), January 4, 2019; and Ely Ratner et al., “Rising to the China Challenge: Renewing American Competitiveness in the Indo-Pacific,”
Center for a New American Security, January 28, 2020, https://s3.amazonaws.com/files.cnas.org/documents/CNAS-Report-NDAA-final-6.
pdf?mtime=20200116130752.
11 Alternatively, the United States could lead the creation of a new multilateral free trade regime for which democracy would be a condition
of membership. Since the CPTPP already exists, however, and most members are democracies, attempting to shape the evolution of the
CPTPP may be more practical than trying to create an entirely new organization.
12 “Free Trade Agreements,” Office of the U.S. Trade Representative (USTR), https://ustr.gov/trade-agreements/free-trade-agreements;
“U.S.-Japan Trade Agreement Negotiations,” USTR, https://ustr.gov/countries-regions/japan-korea-apec/japan/us-japan-trade-agreement-
negotiations; “Indonesia–United States Free Trade Agreement,” Asia Regional Integration Center, December 10, 2019, https://aric.adb.org/
fta/united-states-indonesia-free-trade-agreement; Ashley J. Tellis, “Sign a Free-Trade Deal with Taiwan,” Wall Street Journal, December 3,
2018; Natalie Liu, “Bipartisan Support Seen for a U.S.-Taiwan Free-Trade Deal,” Voice of America, March 28, 2019; and William A. Stanton,
“The Time Is Ripe for a U.S.-Taiwan Free Trade Agreement,” Taiwan News, June 28, 2019. In addition, at the time of writing, the USTR is
conducting a review of Indonesia’s eligibility to continue to receive the benefits of the General System of Preferences (GSP). If this review
results in the removal of Indonesia’s GSP eligibility, it should be restored as quickly as possible. “Ongoing Country Reviews,” USTR, https://
ustr.gov/issue-areas/preference-programs/generalized-system-preferences-gsp/current-reviews/ongoing-country.
13 The only Indo-Pacific countries with which the United States currently has bilateral investment treaties are Bangladesh and Mongolia.
“Bilateral Investment Treaties,” Trade Compliance Center, https://tcc.export.gov/Trade_Agreements/Bilateral_Investment_Treaties/index.asp.
The United States and India began negotiations over a bilateral investment treaty in 2008, but since 2017 these negotiations have stalled. The
United States should reinitiate these discussions and seek to reach an agreement as quickly as possible. A bilateral investment treaty would
give U.S. investors the confidence to invest in India’s energy, infrastructure, and other sectors, which currently have large-scale capital needs.
Such investments could revitalize India’s economic growth, which has been slowing in recent years. See Alyssa Ayres, Our Time Has Come:
How India Is Making Its Place in the World (Oxford: Oxford University Press, 2018), 221–22; and Richard M. Rossow, “U.S.-India Insight: Do
Not Give Up on the Bilateral Investment Treaty,” Center for Strategic and International Studies (CSIS), November 28, 2017, https://www.csis.
org/analysis/us-india-insight-do-not-give-bilateral-investment-treaty.
CHAPTER 6 u CLIFF
119
U.S. foreign aid programs for all of these areas. In 2019, however, total U.S. foreign assistance
spent on Indo-Pacific democracies, where more than a quarter of the world’s population resides,
amounted to less than $900 million, less than 3% of total U.S. foreign assistance spending in 2019.
Thus, the United States could substantially increase its foreign assistance to the democracies of
the Indo-Pacific without significantly affecting its overall foreign assistance expenditures. This not
only would advance the goals listed above; it also should have the effect of improving U.S. relations
with the recipient democracies.14
The United States, in particular, should increase the amount of foreign assistance it provides
to the island nations of the Pacific, which are nearly all democracies. While small, these countries
are strategically located and have been the objects of increased attention from Beijing in recent
years. As can be seen in Table 1, Chinese assistance to several of these countries in 2018, the year
for which the most complete data is available, significantly exceeded that provided by the United
States. Most of the Pacific Island countries for which this was not the case had diplomatic relations
with Taiwan, as China does not provide aid to countries that have diplomatic ties with Taipei. In
2019, however, Kiribati and the Solomon Islands switched relations from Taipei to Beijing. They
are therefore likely to begin receiving foreign aid from China in the future as well, whereas they
have received only minor amounts of economic assistance from the United States in recent years.15
ta b l e 1 U.S. and Chinese aid to Pacific Island nations in 2018 (dollars, million)
Country U.S. assistance Chinese assistance

Cook Islands – 13.0
Fiji 2.5 8.0
Kiribati* – –
Marshall Islands* 42.2 –
Micronesia 64.3 5.0
Nauru* – –
Palau* 68.4 –
Samoa 1.9 5.3
Solomon Islands* 1.2 –
Tonga 1.4 0.7
Tuvalu* – –
Vanuatu 3.6 50.4
n o t e : Asterisk indicates countries that had diplomatic relations with Taiwan in 2018. Chinese assistance
data for Vanuatu is for 2019.
14 Data on U.S. foreign assistance is available from ForeignAssistance.gov. A single Middle Eastern country, Jordan, with a total population of
ten million, received roughly the same amount of U.S. aid in 2019 as did the four billion people of the Indo-Pacific.
15 See ForeignAssistance.gov; “Pacific Aid Map,” Lowy Institute, December 16, 2019, https://pacificaidmap.lowyinstitute.org; and Michael
Wesley, “Oceania: Cold War Versus the Blue Pacific,” in Strategic Asia 2020: U.S.-China Competition for Global Influence, ed. Ashley J. Tellis,
Alison Szalwinski, and Michael Wills (Seattle: NBR, 2020), 190–215. In October 2019, China promised the Solomon Islands a $74 million
grant to build a sports stadium. Laura Zhou, “China Expected to Ramp Up South Pacific Push at Economic Forum in Samoa,” South China
Morning Post, October 19, 2019.

The only Pacific Island countries for which U.S. foreign assistance in 2018 significantly
exceeded Chinese assistance were the Marshall Islands, Micronesia, and Palau. From the end
of World War II until they received their independence in 1986 (the Marshall Islands and
Micronesia) and 1994 (Palau), these three countries were United Nations trust territories
administered by the United States. Upon becoming independent, they entered into the Compacts
of Free Association that gave the United States responsibility for their defense in exchange for
the exclusive right to deploy military forces to their territories. The three countries have received
substantial economic assistance from the United States over the years, but U.S. assistance to
the Marshall Islands and Micronesia is scheduled to end after 2023 and assistance to Palau
is scheduled to end after 2024 (although some of the annual aid allocations has been used to
create trust funds that will continue to provide revenue). The signatories to the Compacts of
Free Association are free to terminate the agreements at any time. Thus, after U.S. economic
assistance to these countries ends, they could be induced to terminate their compacts with the
United States in exchange for economic aid from another country. Indeed, China is already
providing between $5 million and $24 million in aid each year to Micronesia. (The Marshall
Islands and Palau continue to have diplomatic relations with Taiwan and thus have not received
any Chinese aid in recent years.) Termination of the Compacts of Free Association would
potentially allow China to deploy its military forces to the territories of the island countries or
at least deny U.S. forces access in a crisis. Thus, the United States has an interest in continuing
to provide economic assistance to these countries after the current agreements end, including
possibly negotiating another long-term aid commitment.16
Increase defense cooperation with India and Indonesia. The United States should increase
its defense cooperation with the two largest democracies in the Indo-Pacific—India and
Indonesia—neither of which is a U.S. treaty ally. In particular, the United States should emphasize
improving their maritime security capabilities, including coast guard and other maritime
law-enforcement capabilities, along with standard navy capabilities. Defense cooperation should
not be limited to equipment transfers, moreover, but should also include training, educational
exchanges, exercises, and joint peacetime operations such as patrolling territorial waters and
exclusive economic zones.17
Promote multilateral defense cooperation between democracies of the Indo-Pacific. U.S. alliance
relations in the Indo-Pacific are based on a set of bilateral defense treaties. As a result, each alliance
tends to focus primarily on the security concerns of the two member countries. Indo-Pacific
democracies have a collective interest in each other’s security, however, and, together with the
United States, have an aggregate capability to respond to security challenges that is significantly
greater than that of just the United States and any one partner. Thus, the United States should not
only strengthen its own defense relations with these democracies, but it should also encourage
defense cooperation among them.
16 U.S. Department of State, “U.S. Relations with the Federated States of Micronesia,” July 2018, https://www.state.gov/u-s-relations-with-the-
federated-states-of-micronesia; U.S. Department of State, “U.S. Relations with Marshall Islands,” December 2019, https://www.state.gov/u-
s-relations-with-marshall-islands; U.S. Department of State, “U.S. Relations with Palau,” August 2018, https://www.state.gov/u-s-relations-
with-palau; U.S. Compact of Free Association, “About the Compact of Free Association,” December 2019, http://www.uscompact.org/about/
cofa.php; and U.S. Compact of Free Association, “USCompact.org: Documents,” December 2019, http://www.uscompact.org/files/index.
php?dir=FSM%20Publications%2FCompact%20Documents.
17 Aman Thakker and Arun Sahgal, “U.S.-India Maritime Security Cooperation,” CSIS, October 8, 2019, https://www.csis.org/analysis/us-
india-maritime-security-cooperation; and Joshua Kurlantzick, “Keeping the U.S.-Indonesia Relationship Moving Forward,” CFR, Special
Report, February 2018, 17–18.
CHAPTER 6 u CLIFF
121
Japan and Australia have been proactive in this regard. Japan has increased its defense
cooperation with both Australia and India, while Australia has increased its defense cooperation
with Japan, India, and South Korea. These increases are from a low base, however, and South
Korea’s and Indonesia’s defense activities with the other Indo-Pacific democracies have been
limited compared to those of India, Japan, and Australia.18 In addition, like the United States, all of
these countries have tended to focus on individual bilateral relationships as opposed to multilateral
cooperation.19 The United States should promote increased multilateral defense cooperation with
and among these countries, including by organizing exercises and symposia involving the five U.S.
treaty allies in the region (Japan, South Korea, Australia, the Philippines, and Thailand), to which
selected other countries such as India and Indonesia would be invited to participate.20
Push South Korea, Japan, and Australia to play greater roles in regional security. As this report
is being written, the United States and South Korea are in the process of negotiating a new special
measures agreement for 2020, which specifies the amount that South Korea will pay to support
U.S. forces stationed on the Korean Peninsula. The United States has demanded that in 2020 South
Korea quintuple its annual contribution from its 2019 level of $924 million. The outcome of these
negotiations is uncertain at present. The U.S. demand for such a dramatic increase in the amount
that South Korea pays for the presence of U.S. troops has caused protests in South Korea and some
South Korean lawmakers to call for their country to become “self-reliant” for its national defense,
implying an end to the alliance with the United States.21
The demand for an increase in South Korean support for U.S. forces stationed in South Korea
appears to be based on a belief that allies are free-riding on U.S. defense spending. In 2018, however,
South Korea spent $43 billion on defense, which was 2.6% of its GDP. This is a higher percentage
than any other U.S. treaty ally and nearly as much as the 3.2% of GDP that the United States spent
on defense. In addition, South Korea recently paid 94% of the $10.7 billion cost of relocating U.S.
forces previously garrisoned at locations in Seoul and near the border with North Korea to less
vulnerable facilities farther south.22 To demand that Seoul also pay costs beyond those specifically
associated with stationing U.S. troops in South Korea rather than in the United States is excessive,
particularly if it is weakening South Korea’s commitment to the alliance. The alliance is not merely
a U.S. security guarantee to South Korea; rather, it should be seen as a partnership in which both
countries contribute to their joint security needs as well as the security needs of other democracies
18 “Japan and India to Conduct Fighter Jet Drill in Bid to Deepen Security Ties,” Kyodo, December 1, 2019; “Japan, Australia Agree to Boost
Defense Cooperation amid Rising China,” Nikkei Asian Review, November 16, 2018; Ian Hall, “Australia-India Partnership: Strategic
Convergence?” S. Rajaratnam School of International Studies (RSIS), Commentary, December 19, 2018, https://www.rsis.edu.sg/rsis-
publication/rsis/australia-india-partnership-strategic-convergence/#.XrHZPpkpCUk; Aakriti Bachhawat, “No Longer in a Cleft Stick: India
and Australia in the Indo-Pacific,” Australian Strategic Policy Institute, Strategist, June 25, 2019; Tom Corben, “Australia’s Growing Security
Cooperation with South Korea,” Diplomat, October 26, 2017; Jiji Kyodo, “No Progress by Japan and South Korea Defense Chiefs over Intel
Pact in Bangkok,” Japan Times, November 17, 2019; Lakhvinder Singh, “India-Korea Defense Cooperation Needs Reboot,” Asia Times, June
2, 2019; and Evan A. Laksmana, “Reinforcing Indonesia-Australia Defence Relations: The Case for Maritime Recalibration,” Lowy Institute,
October 2, 2018, https://www.lowyinstitute.org/publications/reinforcing-indonesia-australia-defence-relations-case-maritime-recalibration-1.
19 For an Australian perspective on how to increase multilateral defense cooperation in the Indo-Pacific, see Ashley Townshend, Brendan
Thomas-Noone, and Mathilda Steward, “Averting Crisis: American Strategy, Military Spending and Collective Defense in the Indo-Pacific,”
United States Study Centre, University of Sydney, August 19, 2019, 62–65, 67–68, 70–72.
20 The United States, Japan, South Korea, and Australia held a naval exercise involving all four countries in the western Pacific in May 2019.
See Tim Kelly, “U.S., Japan, South Korea, Australia Hold First Naval Drills in Western Pacific,” Reuters, May 23, 2019. Although Thailand is a
U.S. treaty ally, it is not currently a democracy, so its participation should perhaps be limited until democracy is restored.
21 Min Joo Kim, “U.S. Breaks Off Talks with South Korea over Costs of Military Alliance,” Washington Post, November 19, 2019.
22 Josh Smith, “Buying a Big Stick: South Korea’s Military Spending Has North Korea Worried,” Reuters, September 10, 2019; Stockholm
International Peace Research Institute (SIPRI), SIPRI Military Expenditure Database, https://www.sipri.org/databases/milex; David
Maxwell, “U.S.-ROK Relations: An Ironclad Alliance or a Transactional House of Cards?” NBR, November 15, 2019; and Sue Mi Terry,
“Adapting the South Korea–U.S. Alliance to Meet the Challenges of the Twenty-First Century,” in Ironclad: Forging a New Future for
America’s Alliances, ed. Michael J. Green (Washington, D.C.: CSIS, 2019), 124.

in the Indo-Pacific. Indeed, both countries committed to just these principles in a joint vision
statement issued in 2009.23 A rupture in the U.S.–South Korea relationship would deprive the
United States of a key part of one of its most important tools for managing the other challenges it
faces in the region: its network of alliances.
In both its negotiations with South Korea and its negotiations with Japan over a similar
agreement, which will take place this year, the United States should limit its requests for financial
support to at most the additional costs associated with stationing U.S. forces in those countries
relative to the costs of stationing the same forces in the United States. Rather than focusing on
financial support for U.S. forces stationed in allied countries, the United States should instead
focus its efforts on strengthening defense relations with Japan, South Korea, and Australia and
on urging them to increase their capabilities to contribute to the collective defense of democracy
in the Indo-Pacific. All three countries are already moving in this direction, but the United States
should further encourage and emphasize this movement beyond their own defense needs.24
Co-develop and co-produce weapon systems with Japan, South Korea, and Australia. Japan
and South Korea are democracies with significant technological and manufacturing capabilities,
including the ability to design, develop, and produce advanced weapon systems. Australia’s defense
development and manufacturing capabilities are less extensive, but Canberra is also seeking to
strengthen its defense industries. The relatively small sizes of the domestic defense markets in these
allies, however, mean that developing and manufacturing weapons purely for use by their own
militaries is uneconomical. The United States should partner with them in developing new defense
technologies and systems. For example, both Japan and South Korea are currently developing
advanced fighter aircraft. With planned production runs of approximately one hundred aircraft
each, these programs are likely to be extremely costly on a per-unit basis. Meanwhile, although
the U.S.-led F-35 Joint Strike Fighter program included nine partner countries, neither Japan nor
South Korea participated, depriving the program of the considerable technological capabilities
those countries could have contributed. Thus, not only Japan and South Korea but also the United
States would benefit from partnerships in co-developing and co-producing future fighter aircraft,
as opposed to pursuing separate programs.25 Another area in which the United States, Japan, and
South Korea could cooperate is in the development of the intelligence, surveillance, reconnaissance,
and strike capabilities that would be needed to neutralize North Korea’s mobile ballistic missiles
23 “Joint Vision for the Alliance of the United States of America and the Republic of Korea,” White House, Press Release, June 16, 2009, https://
obamawhitehouse.archives.gov/the-press-office/joint-vision-alliance-united-states-america-and-republic-korea.
24 Michael E. O’Hanlon, “What Is Going On with the United States Alliance with South Korea?” Brookings Institution, November 27, 2019;
Bruce Klingner, Jung H. Pak, and Sue Mi Terry, “Trump Shakedowns Are Threatening Two Key U.S. Alliances in Asia,” Brookings Institution,
December 18, 2019; In-Bum Chun, “Korean Defense Reform: History and Challenges,” Brookings Institution, October 31, 2017; Terence
Roehrig, “South Korea: The Challenges of a Maritime Nation,” NBR, Maritime Awareness Project, December 23, 2019, 4–5; Ministry of
National Defense (Japan), National Defense Program Guidelines for FY 2019 and Beyond (Tokyo, December 2018); and Australian Government,
2016 Defence White Paper (Canberra, February 2016), http://www.defence.gov.au/WhitePaper. For an Australian perspective on ways to
improve U.S. and Australian capabilities to contribute to the collective defense of democracy in the Indo-Pacific, see Rory Medcalf, “Toward
a Shared Alliance Strategy in a Contested Indo-Pacific: A View from Australia,” NBR, May 21, 2019; and Townshend, Thomas-Noone, and
Steward, “Averting Crisis,” 61–72.
25 Department of Defence (Australia), 2016 Defence Industry Policy Statement (Canberra, February 2016), https://defence.gov.au/spi/
Docs/2016%20Defence%20Industry%20Policy%20Statement.pdf; Sebastien Roblin, “The F-35 Is an Antique: Japan Is Going All In on a 6th
Generation Fighter,” National Interest, May 27, 2019; “Korea’s Biggest Domestic Weapons Project Takes Off,” Korea Joongang Daily, October
2, 2019; and “The Centerpiece of 21st Century Global Security,” Lockheed Martin, https://www.f35.com/global.
CHAPTER 6 u CLIFF
123
(see below). Finally, in addition to co-developing new systems with these countries, the United
States should consider acquiring or adapting existing systems that they have developed.26
Increase conflict mitigation and reconciliation efforts in Indo-Pacific democracies. India,
Indonesia, the Philippines, and Myanmar are all democracies that are experiencing internal
conflicts. Total U.S. government funding for conflict mitigation and reconciliation programs in
the Indo-Pacific in 2019 was approximately $25 million, roughly 6% of the $422 million spent
on such programs worldwide. While the appropriateness and effectiveness of such programs
depend on specific circumstances, if there are opportunities to strengthen conflict mitigation and
reconciliation efforts in the region’s democracies, the United States should increase funding for
these programs.27
Continue to assist democracies in combating extremist organizations. India, the Philippines,
Myanmar, Indonesia, and Sri Lanka have all suffered one hundred or more fatalities due to
terrorist attacks in the past decade, and the government of the Philippines has been engaged in
significant combat with Islamic extremist organizations in recent years. The United States provides
support to all of these countries for operations against terrorist and extremist organizations and
should continue to do so. As noted in the previous section, however, such assistance should be
conditioned on the governments of these countries not using threats from extremist organizations
as a pretext for restricting democratic freedoms or repressing populations that are simply
demanding greater recognition or autonomy. If there is evidence that this is happening, assistance
should be suspended.28
Expand programs for strengthening democracy in the Indo-Pacific. In 2019, U.S. foreign aid
for programs in the Indo-Pacific promoting democracy, human rights, and good governance
amounted to only $130 million, less than 8% of the $1.6 billion spent on such programs worldwide.
Given that fragile democracies in the region represent more than a quarter of the world’s total
population, this amount should be significantly increased. At the same time, the democracies
of the Indo-Pacific should be held accountable for their human rights records. While helping
strengthen democracy in relatively new or fragile democracies, therefore, the United States should
not refrain from criticizing them for failures or violations of human rights and, when warranted,
suspending cooperation with or imposing sanctions on them.29
Support moderate Islamic forces in Indonesia, Bangladesh, Malaysia, and Maldives. As noted
in chapter 4, militant Islamist ideology has been growing in the Muslim-majority countries of
Indonesia, Bangladesh, Malaysia, and Maldives. Although this trend is largely driven by domestic
26 For example, with the expiration of the U.S.-Russia Intermediate-Range Nuclear Forces Treaty in August 2019, the United States may wish
to deploy land-based missiles with ranges between 500 and 5,500 kilometers, which were previously prohibited by the treaty. Although
the United States produces air- and sea-launched cruise missiles of these ranges that could be relatively easily adapted for ground launch,
it may also wish to deploy intermediate-range ballistic missiles, which it has not produced for more than 30 years. South Korea, however,
has developed ballistic missiles in this category that might be suitable for U.S. purposes. See Sugio Takahashi and Eric Sayers, “America and
Japan in a Post-INF World,” War on the Rocks, March 8, 2019, https://warontherocks.com/2019/03/america-and-japan-in-a-post-inf-world;
“Missile Defense Project,” CSIS, https://www.csis.org/programs/international-security-program/missile-defense-project; and “Missiles of
South Korea,” CSIS, Missile Threat, June 14, 2018.
27 Data is available from ForeignAssistance.gov.
28 National Consortium for the Study of Terrorism and Responses to Terrorism, Global Terrorism Database, https://www.start.umd.edu/
data-tools/global-terrorism-database-gtd; Uppsala Conflict Data Program, UCDP Conflict Encyclopedia, https://ucdp.uu.se/exploratory;
ForeignAssistance.gov; Tara John, “Indonesia’s Long Battle with Islamic Extremism Could Be about to Get Tougher,” Time, January 14,
2016; Kurlantzick, “Keeping the U.S.-Indonesia Relationship Moving Forward,” 18–20; David S. Maxwell, “ISIS in Mindanao: A Threat to
the U.S.?” Hoover Institution, Caravan, September 27, 2017, 16–18; and Joseph Felter, “ISIS in the Philippines: A Threat to U.S. Interests,”
Hoover Institution, Caravan, September 27, 2017, 19–21.
29 ForeignAssistance.gov; and UN Population Division, “World Population Prospects 2019,” https://population.un.org/wpp. Another 4% of
U.S. development assistance went to programs and organizations that operate worldwide. Presumably some of those monies were spent in
the Indo-Pacific, but at least 88% of U.S. development assistance went to other regions.

and international forces that are beyond the ability of the United States to affect, it should still press
the governments of these countries to modify policies that are, intentionally or unintentionally,
having the effect of further strengthening fundamentalist Islamic ideology. The United States
should also increase its support for programs that promote religious tolerance and strengthen
non-ideological education in these countries, such as State Department–funded cultural exchange
programs, Fulbright programs, the Young Southeast Asian Leaders Initiative, and international
schools. In addition, the United States should pressure Saudi Arabia and other Gulf states to end
their funding of fundamentalist mosques and madrasas in the Indo-Pacific.30
Counter Chinese efforts to subvert the political systems of Indo-Pacific democracies. As described
in chapter 3, the Chinese government engages in a variety of efforts to influence the policies and
subvert the political systems of other countries, including the United States. The United States
should take steps to counter these efforts in the Indo-Pacific, particularly in democratic countries.
One means is through information sharing. When U.S. intelligence or law-enforcement agencies
acquire evidence of Chinese influence activities in Indo-Pacific democracies, they should share
that information, to the extent feasible, with their counterparts in those countries and request
that those countries do the same. In addition to the sharing of specific intelligence information,
the governments of the United States and other democratic countries should also exchange
knowledge regarding overall trends and patterns as well as best practices for detecting, thwarting,
and counteracting Chinese influence operations. Given Beijing’s efforts to control the content of
discourses in both the Chinese-language and the mainstream media of Indo-Pacific countries,
the U.S. government should also provide funding to assist independent media outlets in these
countries in producing content in Chinese and other languages and should increase funding for
Voice of America and Radio Free Asia programming in Indo-Pacific languages.31
Prioritize North Korean denuclearization over regime change. A quarter century of efforts to
convince North Korea to relinquish its nuclear weapons programs have failed. This does not mean
that the goal is unachievable, but it does suggest that a new approach is needed. The principal
purpose of North Korea’s nuclear weapons program has been to ensure regime survival. To
convince Pyongyang to dismantle its nuclear weapons and facilities, therefore, will likely require
an alternative way of assuring the North Korean regime that it will be allowed to remain in power,
combined with positive incentives for dismantling its nuclear weapons and strong disincentives
for keeping them.32
Since most of North Korea’s trade goes through China, and since China is North Korea’s primary
security guarantor, this implies that China will need to implement most of the disincentives for
North Korea keeping its nuclear weapons. As argued in chapter 3, Beijing’s overriding goal on
30 Shaun Tan, “Wahhabi Wannabes and Malaysia’s Moderate Muslim Myth,” Hoover Institution, Caravan, September 27, 2017; Paul Wolfowitz,
“Whither Indonesia?” Hoover Institution, Caravan, September 27, 2017, 22–24; C. Christine Fair, “Political Islam and Islamist Terrorism in
Bangladesh,” Lawfare, January 28, 2018, https://www.lawfareblog.com/political-islam-and-islamist-terrorism-bangladesh-what-you-need-
know; Joshua Kurlantzick, “The Rise of Islamist Groups in Malaysia and Indonesia,” CFR, February 27, 2018; and Russell A. Berman, “Islam,
Islamism and U.S. Strategy in Maritime Southeast Asia,” Hoover Institution, Caravan, September 27, 2017, 25–26.
31 Medcalf, “Toward a Shared Alliance”; Larry Diamond and Orville Schell, Chinese Influence and American Interests: Promoting Constructive
Vigilance (Stanford: Hoover Institution Press, 2018); Carolyn Kenney, Max Bergmann, and James Lamond, “Understanding and Combating
Russian and Chinese Influence Operations,” Center for American Progress, February 28, 2019; Orville Schell and Susan L. Shirk, “Course
Correction: Toward an Effective and Sustainable China Policy,” Asia Society Center on U.S.-China Relations, February, 2019, 42–44;
U.S.-China Economic and Security Review Commission, “China’s Overseas United Front Work: Background and Implications for the United
States,” August 24, 2018, https://www.uscc.gov/sites/default/files/Research/China’s%20Overseas%20United%20Front%20Work%20-%20
Background%20and%20Implications%20for%20US_final_0.pdf; and Lloyd-Damnjanovic, “A Preliminary Study of PRC Political Influence
and Interference Activities in American Higher Education,” Woodrow Wilson International Center for Scholars, September 6, 2018.
32 See Ken E. Gause, “Diplomacy in the Land of No Good Options,” Jamestown Foundation, 2018, 42–44, https://jamestown.org/wp-content/
uploads/2018/12/Diplomacy-in-the-Land-of-No-Good-Options-1.pdf?x84785.
CHAPTER 6 u CLIFF
125
the Korean Peninsula is maintaining stability, which includes North Korea’s continued existence
as a separate state from South Korea. By guaranteeing the survival of the Pyongyang regime, the
United States would also satisfy a condition for convincing Beijing to put pressure on North Korea.
Allowing the North Korean regime to survive is unquestionably distasteful. The North
Korean government is one of the most brutal and oppressive in the world. As argued in chapter 4,
however, there is scant evidence that it is on the verge of collapse and, therefore, the United States
can probably do little to hasten regime change. Meanwhile, North Korea’s possession of nuclear
weapons increases its ability to engage in aggression. For example, it is possible that Pyongyang
could calculate that, even though the United States has mutual defense treaties with Japan and
South Korea, if North Korea were to attack one of those countries with nuclear weapons, its
capability to also reach the United States with nuclear weapons would deter the United States
from using its own nuclear capabilities against North Korea in response. Even if North Korea did
not actually attack one of these countries with nuclear weapons, a belief on the part of Pyongyang
that it could do so with impunity might encourage it to attempt to coerce or engage in aggression
against a neighboring country using conventional forces. Concerns about such scenarios in turn
could deter Seoul and Tokyo from assertively defending their interests in Northeast Asia.33
Moreover, so long as Pyongyang possesses nuclear weapons, a collapse of governance could be
extremely dangerous for the region. Given the precariousness of the North Korean economy even
in normal times, a collapse of governance or a civil war resulting from a leadership split in North
Korea would likely result in a major humanitarian crisis and large numbers of refugees fleeing
north toward China and south toward South Korea. As a consequence, Chinese, South Korean,
or U.S. military forces could be drawn into North Korea, either in an effort to restore order in
response to a breakdown of governance in North Korea or at the request of one or more North
Korean factions claiming to be the legitimate government of the country and needing assistance in
suppressing a rebellion by the other faction or factions. In such potentially chaotic circumstances,
it is possible to imagine North Korea’s nuclear, biological, or chemical weapons being used by one
faction against another, against intervening foreign forces, or against neighboring countries or
even the United States. They might also be smuggled out of the country and provided to actors
hostile to the United States. The priority of the United States, therefore, should be to first achieve
denuclearization, even if that requires allowing the survival of the existing government for the
time being.
North Korean leaders have long sought a peace treaty with the United States, presumably
because they believe that such a treaty would represent a commitment by Washington to allow
North Korea to survive. The most effective vehicle for assuring Pyongyang and Beijing that the
United States does not seek regime change, therefore, would probably be some sort of formal treaty
or communiqué between the three parties.
Agreeing to accept the formal division of the Korean nation might be politically difficult for
a South Korean government. The sudden absorption of North Korea by South Korea, however,
would be costly and painful, much more so than was the reunification of Germany in 1990. It is in
South Korea’s interests, therefore, for any unification process to be a gradual one. With assurances
that the United States and South Korea would not attempt to exploit any resulting instability,
moreover, North Korean rulers might have enough confidence in the security of their regime
33 See Vince A. Manzo and John K. Warden, “Want to Avoid Nuclear War? Reject Mutual Vulnerability with North Korea,” War on the Rocks,
August 29, 2017, https://warontherocks.com/2017/08/want-to-avoid-nuclear-war-reject-mutual-vulnerability-with-north-korea.

that they would be willing to allow more extensive economic reforms than they have to date. This
could result in North Korea, over time, closing the economic development gap with South Korea
and would give the North Korean people time to become accustomed to the norms and culture of
the capitalist world prior to unification with the South.34
There is no guarantee that Beijing and Pyongyang will accept the bargain proposed above.
Even if they ultimately agree to it, the process of reaching that point will undoubtedly be difficult
and frustrating. Given the dangers that North Korea’s nuclear weapons pose, however, the United
States must continue to seek new ways to convince Pyongyang to relinquish them.
Seek to defuse other regional disputes. Fundamentally resolving the other major territorial
disputes in the region will also be challenging. Nonetheless, it may be possible to find ways to at
least reduce the likelihood of these disputes sparking conflict. In the case of Taiwan, for example,
the United States could potentially assuage Beijing’s concerns about Taiwan formalizing its
independence by promising not to recognize Taiwan as an independent country in the event of a
declaration of independence, provided that Beijing pledges not to use force in any circumstances
short of a formal declaration of independence for a specified period of time.
For the territorial dispute over the Senkaku/Diaoyu Islands, the United States could attempt
to broker an agreement whereby China and Japan would agree to defer the issue. During this
period of time, Japan would promise not to build any facilities or station any personnel on the
islands, while China would refrain from sending vessels or aircraft into the territorial waters or
airspace of the islands. For the competing claims in the South China Sea, China and the members
of the Association of Southeast Asian Nations (ASEAN) have been negotiating a code of conduct
to reduce the likelihood of conflict. China’s position in these negotiations, however, is unlikely
to be accepted by the other disputants. Thus, the negotiations will probably not result in an
agreement unless China modifies its position. The United States should recruit a neutral party
with a reputation for successfully brokering international agreements (e.g., Norway) to mediate
the negotiations and then mobilize international pressure on the disputants to work with this
neutral party to reach an agreement on a fair and equitable code of conduct.35
Prospects for a resolution of the Kashmir dispute appear to be poor. Any solution acceptable to
Pakistan and the majority of residents of Kashmir would probably require significant territorial
concessions by India. Recently, however, New Delhi has instead been tightening its control over
the territory. In October 2019, it revoked Kashmir’s autonomous status within India and divided it
into two states under direct federal control. India is also opposed to U.S. mediation in the dispute.
Nonetheless, it is conceivable that a future Indian government might be more amenable to finding
a solution. Washington should seek opportunities and incentives to encourage New Delhi to
resolve the Kashmir issue in a way that is acceptable to Islamabad. Resolution of the dispute would
allow India to redeploy for other purposes the forces, resources, and strategic attention currently
devoted to combatting terrorism in Kashmir and deterring Pakistan from taking military action
in the region.36
34 For further exposition on this proposal, see Roger Cliff, “North Korea’s Nukes Will Only Go If Kim Gets to Stay,” National Interest, July 18, 2017.
35 For a reasonable set of provisions that a code of conduct should contain, see South China Sea Expert Working Group, “A Blueprint for a South
China Sea Code of Conduct,” CSIS, Asia Maritime Transparency Initiative, October 11, 2018.
36 Hannah Ellis-Petersen and a reporter in Srinagar, “India Strips Kashmir of Special Status and Divides It in Two,” Guardian, October 31, 2019;
Stuti Bhatnagar, “Mediation a Long Shot,” Lowly Institute, Interpreter, January 29, 2019; and Sanjeev Miglani, “Trump Touches Off Storm in
India with Kashmir Mediation Offer,” Reuters, July 23, 2019.
CHAPTER 6 u CLIFF
127
Create a regime to restrict transfers of military technology to authoritarian countries. Inhibiting
the ability of authoritarian countries to acquire military and dual-use technologies would reduce
the threat that these countries present to the democracies of the Indo-Pacific. However, there
is currently no international regime to regulate the export of such technologies. The existing
Wassenaar Arrangement, for example, is simply a voluntary organization for exchanging
information about transfers of conventional arms and dual-use goods and technologies. It has no
specific prohibitions on transfers, and the organization does not have a mechanism to prevent a
member country from exporting any technologies. The United States should work with the world’s
democracies to create an international export-control regime to restrict transfers of military and
dual-use technologies to authoritarian countries. The membership and control lists of this regime
could be similar to those of the Wassenaar Arrangement, with some modifications. Russia and
Turkey are not democracies and should probably be excluded, while the organization ideally
would include Israel.37
Strengthen capabilities to counter theater missile attacks. As noted earlier in this chapter,
although using nuclear weapons to attack the United States would be suicidal for North Korea, its
possession of that capability increases its ability to engage in other forms of aggression, including
using nuclear weapons against a U.S. ally such as Japan or South Korea. Even if North Korea did not
actually attack those countries with its nuclear weapons, the capability to do so could encourage
Pyongyang to attempt to coerce Seoul or Tokyo or to engage in aggression using conventional
forces. The United States should, therefore, make clear to all parties that the U.S. extended nuclear
umbrella continues to apply to its allies and that any attack on U.S. allies with nuclear, biological,
or chemical weapons would potentially be subject to nuclear retaliation from the United States.
Yet, given the possibility that this deterrent could nonetheless fail, particularly in the event of
a civil war or regime failure in North Korea, the United States and its allies need ways to prevent
nuclear weapons from reaching their territories. The United States, Japan, and South Korea
should continue their efforts to develop capabilities to detect and preempt an imminent North
Korean missile attack and, as noted above, should cooperate more closely with each other in this
endeavor.38 At the same time, the United States and its allies should expand their theater missile
defenses and strengthen their capabilities to manage the consequences of nuclear, biological, or
chemical weapons attacks. Although such capabilities cannot be expected to completely eliminate
the threat of such attacks, they can significantly reduce the amount of damage suffered if such
attacks occur.39 Strengthened capabilities to counter theater missiles will also weaken China’s
prospects for successfully using conventional force against Taiwan, Japan, or the Philippines.
Theater missile defenses should either be located in the potential target countries in peacetime
or else be capable of being rapidly deployed by air or sea in a crisis. For example, the Terminal
High Altitude Area Defense (THAAD) system can be relatively quickly deployed by air, while
37 “The Wassenaar Arrangement at a Glance,” Arms Control Association, December 2017, https://www.armscontrol.org/factsheets/wassenaar;
“Wassenaar Arrangement,” Nuclear Threat Initiative, July 31, 2018; and “Wassenaar Arrangement,” Federation of American Scientists,
January 16, 2020. For a detailed discussion of how to slow the diffusion of technology to one country in particular (China), see Charles
W. Boustany Jr. and Aaron L. Friedberg, “Partial Disengagement: A New U.S. Strategy for Economic Competition with China,” NBR, NBR
Special Report, no. 82, 12–18, 22–23.
38 Manzo and Warden, “Want to Avoid Nuclear War?”
39 David Ochmanek and Lowell H. Schwartz, The Challenge of Nuclear-Armed Regional Adversaries (Santa Monica: RAND Corporation, 2008),
53–56.

ships equipped with the Aegis Ballistic Missile Defense System can reach the waters of Northeast
Asia in a matter of days from most locations in the Pacific.40
Strengthen capabilities to defeat amphibious invasions. Many of the military threats to
democracies in the Indo-Pacific involve disputes over the territorial status of islands. One way in
which the other claimants might seek to resolve these disputes in their favor, therefore, is through
an amphibious invasion. To deter and, if necessary, defeat such attempts, the United States should
strengthen its capabilities to prevent amphibious invasions (which could include helicopter-borne
and airborne dimensions). This includes the capability to detect preparations for an invasion
as well as capabilities to detect, track, identify, and destroy or disable ships, landing craft, and
transport aircraft in the face of advanced anti-air and antisubmarine warfare capabilities.
Strengthen the capability to project air power into the western Pacific. North Korea’s use of force
against South Korea or Japan or China’s use of force against Taiwan or the Philippines would likely
entail efforts to prevent the United States from operating air forces from nearby bases and aircraft
carriers. This could involve missile, air, submarine, and other types of attacks on the bases and
aircraft carriers as well as efforts to control the airspace in the combat theater using fighter aircraft
and long-range surface-to-air missiles. Successfully defending these countries, therefore, requires
the U.S. military to possess the means to neutralize attacks on bases and aircraft carriers (using
a combination of air and missile defenses, passive defenses, electronic warfare, antisubmarine
capabilities, operational flexibility, and systems capable of operating from longer ranges), as well as
the means to defeat fighter aircraft and long-range surface-to-air and air-to-air missiles.41
Strengthen blockade-breaking capabilities. North Korea’s use of force against South Korea or
Japan or China’s use of force against Taiwan or the Philippines might also entail the imposition of
a blockade on all or part of these countries using missile, air, and naval forces. The U.S. military
should ensure that it has the capability to deliver forces and supplies both to large islands, like
Japan, Taiwan, or South Korea (which is effectively an island, given that North Korea sits astride
its only land border), and to small islands, such as the Spratly or Senkaku Islands, in the face of
a concerted blockade. This requires the capability to protect transport aircraft and ships, as well
as the airports and seaports at which the forces and supplies would be unloaded, from missile,
air, and naval attack. Since such attacks might nonetheless render major airports and seaports
unusable, moreover, the United States also needs the capability to rapidly clear mines, repair
damaged facilities, and deliver large quantities of forces or supplies to unimproved airstrips,
shallow water ports, or directly onto land without going through an airport or seaport.42
Pressure authoritarian countries over democracy and human rights. A strategy of democracy
strengthening in the Indo-Pacific implies efforts not just to bolster and secure democratic
countries but also to promote democratic norms and human rights in the authoritarian countries
of the region. Human rights should be a regular topic of discussion in diplomatic dialogues with
these countries, the United States should publicize their human rights violations, and there
should be limitations on exchanges, trade, and investment with them based on their human
40 “Terminal High Altitude Area Defense (THAAD),” U.S. Department of Defense, Missile Defense Agency, https://www.mda.mil/system/
thaad.html; and “Aegis Ballistic Missile Defense,” U.S. Department of Defense, Missile Defense Agency, https://www.mda.mil/system/aegis_
bmd.html.
41 David Ochmanek, “Sustaining U.S. Leadership in the Asia-Pacific Region,” RAND Corporation, January 1, 2015.
42 For a discussion of some of the requirements for such a capability, see Eric V. Larson et al., Assuring Access in Key Strategic Regions: Toward a
Long-Term Strategy (Santa Monica: RAND Corporation, 2004), 120–29.
CHAPTER 6 u CLIFF
129
rights records.43 In the case of North Korea, although the primary objective of negotiations
should be the dismantling of the country’s nuclear weapons, the United States and its partners
must make clear to Pyongyang that a complete lifting of sanctions will require improvements in
its human rights record.
The United States should urge other democracies to pressure the authoritarian countries of
the Indo-Pacific over human rights as well. Coordinated, unified pressure is more likely to be
effective than disparate efforts that provide opportunities for authoritarian countries to attempt
to play countries against each other or to evade sanctions. Some authoritarian leaders may feel
that their hold on power is such that they either are unable to or have no need to allow significant
improvements in human rights. The United States and other democracies should not assume
that fundamental improvements are impossible in these countries, however, and even minor
improvements are nonetheless improvements. The United States can also provide support to
exile communities in these cases. Although authoritarian countries cannot be forced to become
democracies, U.S. support for democratic norms and human rights can help lay the groundwork
for a future democratic transition and improve the United States’ prospects for having friendly
relations with the country when it does become a democracy.44
Prepare for the possibility of a collapse of governance in North Korea. Although there is currently
little evidence that the Kim Jong-un regime is on the verge of collapse, that could change with
little advance warning. As noted earlier in this chapter, if such a scenario were to transpire, North
Korea’s nuclear, biological, or chemical weapons could conceivably be used by one faction against
another, against intervening foreign forces, or against neighboring countries or the United States.
These weapons might also be smuggled out of the country and provided to actors hostile to the
United States. Consequently, Washington should further strengthen its capabilities to locate and
secure North Korea’s nuclear, biological, and chemical weapons and materials in the event of a
collapse of governance. In addition, if they are not already doing so, the United States and China
should quietly discuss ways to avoid miscommunication or misunderstanding during any actions
they may take to secure North Korea’s fissile materials in such a scenario.
Increase the U.S. capacity for disaster response. The vast majority of people affected by natural
disasters worldwide each year are in the Indo-Pacific, including more than half of those killed.
The populations and the economic, social, and cultural assets within areas of the Indo-Pacific
that are most likely to experience natural disasters are increasing rapidly.45 Further complicating
matters, as a result of global climate change, South and Southeast Asia are expected to see an
increase in the frequency and intensity of certain types of natural disasters.46 Demand for U.S.
disaster assistance has been increasing throughout the world in recent years. In 2019 the United
States appropriated more than $9 billion in disaster assistance for foreign countries, nearly double
the amount appropriated in 2009. Only about 4% of the more than $36 billion in humanitarian
assistance the United States disbursed between 2015 and 2019 went to the Indo-Pacific, however.
Given that providing humanitarian assistance and disaster relief increases U.S. soft power, and that
43 Daniel Bessner and Isaac Stone Fish, “How the Left Should Respond to Ethnic Cleansing in China,” Nation, January 15, 2019, https://www.
thenation.com/article/archive/left-foreign-policy-china.
44 Kurt M. Campbell and Jake Sullivan, “How America Can Both Challenge and Coexist with China,” Foreign Affairs, August 1, 2018; Schell
and Shirk, “Course Correction,” 39–40; and Muravchik, Exporting Democracy, 211.
45 Asian Development Bank (ADB), Asian Development Outlook 2019: Strengthening Disaster Resilience (Manila: ADB, 2019), 59, 61, 70.
46 Intergovernmental Panel on Climate Change, “Global Warming of 1.5oC,” 2018, 189–204, http://www.ipcc.ch/report/sr15.

the frequency and severity of disasters is likely to increase in the future, the United States should
expand its capabilities and be prepared to increase its level of assistance in the Indo-Pacific.47
Strengthen environmental cooperation with Indo-Pacific countries. As noted in other parts of this
report, the Indo-Pacific is a major source of environmental pollution. Approximately one-third of
all greenhouse gas emissions and two-thirds of oceanic plastic waste, both of which affect people
throughout the world, originate in the Indo-Pacific. Air pollution levels in the region are also well
above global averages, and not only are regional countries affected, but even the United States is.
Thus, it is in the self-interest of the United States to work with the countries of the Indo-Pacific
to reduce their production of pollutants and greenhouse gases. Doing so, moreover, will increase
U.S. soft power in the region. In particular, global climate change is an existential threat for many
Pacific Island nations because of the resultant sea-level rise. A strengthened U.S. commitment to
reducing carbon emissions, therefore, would contribute significantly to U.S. influence and soft
power in these countries.
Cooperation could include coordination of policies, exchanges of best practices, and the
licensing of pollution-reducing technologies. In particular, the United States should increase the
amount of assistance for environmental protection that it provides to the region’s developing
countries. In 2018, total U.S. assistance for environmental protection amounted to $585 million,
about 1% of all U.S. foreign aid. Much of this assistance went to Indo-Pacific countries, but the
total amount was modest and should be increased.48
Support Japan and India becoming permanent members of the UN Security Council. India and
Japan, both of which are major powers by most measures, have long sought to become permanent
members of the UN Security Council. The United States has expressed support for their bids but
has not vigorously promoted the reforms to the Security Council that would be required. Becoming
permanent members would encourage both countries to play greater roles in world affairs and would
counterbalance the influence on the Security Council of authoritarian China and Russia. Japan has
long been a close ally of the United States. Although India may not always align with the United States
on issues before the Security Council, on balance its presence would also advance U.S. interests.
The most likely scenario for these countries becoming members of the Security Council would
be as part of a broader reform that would see Germany, Brazil, and perhaps South Africa become
permanent members as well. Even if U.S. efforts on behalf of Japan and India are unsuccessful
in the near term (given that China and Russia both have the capability to veto amendments to
the UN charter), strong and public support for their bids would strengthen U.S. relations with
both countries.49
Conclusion
The challenges that the United States will face in the Indo-Pacific in the coming decade will
likely be more daunting than any it has faced since the end of the Cold War. The wise approach
47 ForeignAssistance.gov; and USAID, “Office of U.S. Foreign Disaster Assistance,” https://www.usaid.gov/who-we-are/organization/bureaus/

bureau-democracy-conflict-and-humanitarian-assistance/office-us. Another 20% of U.S. humanitarian assistance went to programs
and organizations that operate worldwide. Presumably some of those monies were spent in the Indo-Pacific, but at least 76% of U.S.
development assistance went to other regions.
48 ForeignAssistance.gov.
49 Ayres, Our Time Has Come, 97–99; and Peter Harris, “Why Japan Will Never Be a Permanent Member of the UN Security Council,”
National Interest, August 4, 2014.
CHAPTER 6 u CLIFF
131
will be to not attempt to single-handedly overcome those challenges but to face them together with
a broad and powerful array of allies. The most natural allies of the United States in this endeavor
will be those countries that share its values of freedom and democracy and that face many of
the same challenges. A strategy that focuses on strengthening U.S. relations with Indo-Pacific
democracies and making those countries stronger and more secure, therefore, is consistent both
with the principles on which the United States is based and with its strategic interests.

Seattle and Washington, D.C.
1414 ne 42nd street, suite 300

seattle, washington 98105 usa
phone 206-632-7370, fax 206-632-7487
1819 l st nw, ninth floor

washington, d.c. 20036 usa
phone 202-347-9767, fax 202-347-9766
nbr@nbr.org, www.nbr.org

Sr86 Cliff June2020

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sr86 Cliff June2020

Uploaded by

Copyright:

Available Formats

the national bureau of asian research

nbr special report #86 | june 2020

a new u.s. strategy

NBR Chairman’s Council and Board of Advisors

Michael Armacost Carla A. Hills Sam Nunn

a new u.s. strategy

ROGER CLIFF conducts research on international relations in the Indo-Pacific. He

For further information about NBR, contact:

a new u.s. strategy

11 Chapter 2: Long-Term Regional Trends

31 Chapter 3: The Strategies of Key Regional Actors

67 Chapter 4: Potential Major Events

97 Chapter 5: Resources Available to the United States for an Indo-Pacific Strategy

109 Chapter 6: A New U.S. Strategy for the Indo-Pacific

vi NBR SPECIAL REPORT • JUNE 2020

The Need for a Strategy

f i g u r e 1 Map of the Indo-Pacific

Nor th Pacific Ocean

South Pacific Ocean

4 NBR SPECIAL REPORT u JUNE 2020

6 NBR SPECIAL REPORT u JUNE 2020

U.S. Interests in the Indo-Pacific13

8 NBR SPECIAL REPORT u JUNE 2020

10 NBR SPECIAL REPORT u JUNE 2020

Long-Term Regional Trends

f i g u r e 2 Population projections for China and India (2020–50)

14 NBR SPECIAL REPORT u JUNE 2020

f i g u r e 3 Total GDP growth of the Indo-Pacific (1993–2024)

f i g u r e 5 Projected ten largest economies in the Indo-Pacific in 2030

16 NBR SPECIAL REPORT u JUNE 2020

f i g u r e 6 Total international trade of the Indo-Pacific (1993–2018)

Conflict and Violence

18 NBR SPECIAL REPORT u JUNE 2020

f i g u r e 8 Fatalities due to terrorist attacks in the Indo-Pacific (1994–2017)

12 “Thailand,” Freedom House, https://freedomhouse.org/country/thailand; “Cambodia,” Freedom House, https://freedomhouse.org/country/

20 NBR SPECIAL REPORT u JUNE 2020

f i g u r e 10 Top seven defense spenders among Indo-Pacific countries (1993–2018)

22 NBR SPECIAL REPORT u JUNE 2020

24 NBR SPECIAL REPORT u JUNE 2020

22 Health Effects Institute, “State of Global Air 2019.”

24 “Global Carbon Atlas,” Global Carbon Project, http://www.globalcarbonatlas.org/en/CO2-emissions.

26 NBR SPECIAL REPORT u JUNE 2020

f i g u r e 16 CO2 emissions of the Indo-Pacific (1992–2017)

28 NBR SPECIAL REPORT u JUNE 2020

The Strategies of Key Regional Actors

34 NBR SPECIAL REPORT u JUNE 2020

Continuing Relative Economic Openness

Transforming China into a Global Technology Leader

Promoting the Belt and Road Initiative

36 NBR SPECIAL REPORT u JUNE 2020

Continuing Military Modernization

Recovering Lost Territories

38 NBR SPECIAL REPORT u JUNE 2020

Maintaining Stability on the Korean Peninsula

40 NBR SPECIAL REPORT u JUNE 2020

Increasing Influence over the Policies of Other Countries

42 NBR SPECIAL REPORT u JUNE 2020

Reshaping International Norms and Institutions

44 NBR SPECIAL REPORT u JUNE 2020

46 NBR SPECIAL REPORT u JUNE 2020

Countering Threats from Pakistan

48 NBR SPECIAL REPORT u JUNE 2020

Increasing India’s Influence in the Indian Ocean Region

Increasing India’s International Prestige